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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 2 years ago
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