Support Departments General Factory Producing Departments Pesticide Liquid Fertilizer Power Purchasing S167,000 1,500 1,345 Overhead $90,000 1,500 $314,000 $78,900 4,200 24,000 s107,800 Square feet Machine hours 4,800 8,000 60 1,403 Purchase orders 20 40 7 120
Jasmine Company manufactures both pesticide and liquid fertilizer, with each product manufactured in separate departments. Three support departments support the production departments: Power, General Factory, and Purchasing. Budgeted data on the five departments are as follows:
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The company does not break overhead into fixed and variable components. The bases for allocation are power—machine hours; general factory—square feet; and purchasing— purchase orders.
Required:
1. Allocate the overhead costs to the producing departments using the direct method. (Take allocation ratios out to four significant digits. Round allocated costs to the nearest dollar.)
2. Using machine hours, compute departmental overhead rates. (Round the
overhead rates to the nearest cent.)
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