Maddock Company has two service departments and two producing departments. Budgeted costs and budgeted activity...

Maddock Company has two service departments and two producing departments. Budgeted costs and budgeted activity in the various departments for last year are shown below. (show all calculations)

Departments 2 Service Departments 2 Production

	Custodial Services	Cafeteria	Cutting Department	Assembly Department
Department overhead costs	$50,400	$28,000	$120,000	$200,000
Square meters occupied	500	1,000	4,000	5,000
Number employees	10	15	75	100
Machine hours			10,000	15,000

Service department costs are allocated to producing department with the costs of Custodial Services allocated on the basis of square meters of space occupied and the costs of the Cafeteria on the basis of the number of employees. The department costs for the Cutting and the Assembly departments are overhead costs. Predetermined overhead rates in the Cutting and Assembly department are based on machine hours.

Assume that the company uses the direct method of allocation. Calculate the predetermined overhead rate for the Assembly Department.

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ekkarill92 answered 1 year ago

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