Question
In: Accounting
Manufacturing Overhead Distribution Worksheet The following are selected operating data for the production and service departments...
Manufacturing Overhead Distribution Worksheet
The following are selected operating data for the production and service departments of Bluestone Company for 2016.
| Departments | |||||
|---|---|---|---|---|---|
| Service | Production | ||||
| 1 | 2 | 1 | 2 | ||
| Overhead costs (identified by department) | |||||
| Indirect material | $121,000 | $205,500 | $63,600 | $1,290,000 | |
| Indirect labor | $243,000 | $360,000 | $81,460 | $3,597,500 | |
| Square feet of building floor space used | 12,000 | 18,000 | 30,000 | 60,000 | |
| Assessed value of equipment used | $52,500 | $157,500 | $315,000 | $525,000 | |
| Cubic yards of factory space used | 220,000 | 330,000 | |||
| Machine hours | 128,000 | 512,000 | |||
| Direct labor | $50,000 | $1,000,000 | |||
Building depreciation of $240,000 is allocated on the basis of square feet of floor space. Personal property taxes of $90,000 are allocated on the basis of assessed values of equipment used. Costs for service departments 1 and 2 are allocated to production departments on the basis of cubic yards of factory space and machine hours, respectively.
Required
a. Prepare a 2016 overhead distribution worksheet for Bluestone Company similar to the one prepared for Exhibit 3-15.
Use negative signs with answers, when appropriate. Under the Allocation Basis column, select the basis used to calculate each allocation.
Solutions
Expert Solution
| Bluestone Company | |||||||||||||
| Overhead Distribution Worsksheet | |||||||||||||
| For the Year Ended December 31, 2016 | |||||||||||||
| Service departments | Production departments | Allocation basis | |||||||||||
| 1 | 2 | 1 | 2 | ||||||||||
| Directly identifiable with departments: | |||||||||||||
| Indirect material | 121000 | 205500 | 63600 | 1290000 | |||||||||
| Indirect labor | 243000 | 360000 | 81460 | 3597500 | |||||||||
| Allocated to departments: | |||||||||||||
| Building depreciation | 24000 | 36000 | 60000 | 120000 | Square feet of building floor space used | ||||||||
| ($ 240000 at 12000:18000:30000:60000 or 2:3:5:10) | 240000*(2/20) | 240000*(3/20) | 240000*(5/20) | 240000*(10/20) | |||||||||
| Personal property taxes | 4500 | 13500 | 27000 | 45000 | Assessed value of equipment used | ||||||||
| ($ 90000 at 52500:157500:315000:525000 or 1:3:6:10) | 90000*(1/20) | 90000*(3/20) | 90000*(6/20) | 90000*(10/20) | |||||||||
| Total overhead | 392500 | 615000 | 232060 | 5052500 | |||||||||
| Allocation of service departments: | |||||||||||||
| Dept. 1 | ($392500 at 220000:330000 or 2:3) | -392500 | 0 | 157000 | 235500 | Cubic yards of factory space used | |||||||
| 392500*(2/5) | 392500*(3/5) | ||||||||||||
| Dept. 2 | ($615000 at 128000:512000 or 1:4) | 0 | -615000 | 123000 | 492000 | ||||||||
| 615000*(1/5) | 615000*(4/5) | ||||||||||||
| Total allocated overhead | 0 | 0 | 512060 | 5780000 | |||||||||
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