Presented below are certain operating data for the four departments of Tally Manufacturing Company.     Service Production   1 2 1 2 Total manufacturing overhead costs either identifiable with or allocated to each department $72,000 $86,400 $108,000 $117,600 Square feet of factory floor space     48,000 96,000 Number of factory workers     110 70 Planned direct labor hours for the year     24,000 36,000 Allocate, to the two production departments, the costs of service departments 1 and 2, using factory floor space and number of workers, respectively, as bases. Do not round bases when calculating reallocations of service departments.     Production   1 2 Identifiable and allocated overhead Answer   Answer   Reallocation of service departments:     Dept. 1 Factory floor space Answer   Answer   Dept. 2 Number of factory workers Answer   Answer   Total manufacturing overhead Answer   Answer     What is the apparent overhead rate for each production department if planned direct labor hours are the overhead application base? Round answers to two decimal places, when applicable. Production 1 Answer   Production 2 Answer

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.