San Leandro Company has two production departments, assembly and finishing, and two service departments, machine setup and inspection. Machine setup costs are allocated based on the number of setups, whereas inspection costs are allocated on the basis of number of direct labor hours. Selected information on the four departments follows: 

Required 

(a) Using the direct methoMurphy Company has two service departments and two production departments. Information on annual manufacturing overhead costs and cost drivers follows: d, determine the amount of machine setup costs allocated to the two production departments. 

(b) Using the direct method, determine the amount of inspection costs allocated to the two production departments.

Transcribed Image Text:

ITEM Machine setup Inspection. Assembly Finishing. DIRECT COSTS $50,000 18,000 25,000 20,000 NUMBER OF SETUPS 0 0 350 150 DIRECT LABOR HOURS 0 0 300 600