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Andersen Grocery is trying to calculate costs in several departments. They have the following cost data available:

	Produce	Frozen	Deli	Total
# of Items Sold	25,000	225,000	62,500	312,500
# of Purchase Orders	300	700	600	1,600
# of Deliveries	250	1,500	750	2,500
Hours of Shelf Time	1,000	5,000	4,000	10,000

Currently overhead costs are allocated based on the number of items sold (one cost pool). Overhead costs are as follows:

Ordering Costs: $50,000

Delivery Costs $200,000

Shelf Stocking Costs $150,000

Total Budgeted Overhead Costs $400,000

Required

• Allocate the total overhead among the three departments using one pool using number of items sold.
• Allocate the overhead between the three departments using ABC costing as follows:

• Allocate ordering costs based on the number of purchase orders
• Allocate delivery costs based on the number of deliveries
• Allocate shelf stocking costs based on the number of hours of shelf stocking

Overhead Rate One Pool (# of items sold)
Overhead Rate Ordering Costs
Overhead Rate Delivery Costs
Overhead Rate Shelf Stocking Costs

Allocation of Overhead

	Produce	Frozen	Deli	Total
Allocation of Overhead One Pool
Allocation of Ordering Costs
Allocation of Delivery Costs
Allocation of shelf Stocking Costs
Total Overhead Costs

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