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QUESTION 2 (5 marks) Westmore Company has two Service Departments and two Operating Departments. Budgeted...

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QUESTION 2 (5 marks) Westmore Company has two Service Departments and two Operating Departments. Budgeted costs and other data relating to these departments are presented below: Building & Grounds $54,000 Operating Department A B $650,000 $800,000 Personnel $200,000 Departmental Costs 55 Square Metres Occupied 1,000 3,000 12,000 15,000 Number of Employees 10 5 45 Direct Labour Hours 80,000 92,000 The costs of Building & Grounds are allocated first on the basis of square metres of space occupied. Personnel costs are allocated on the basis of number of employees. The departmental costs for the Operating Departments are overhead costs. Predetermined overhead rates in the Operating Departments are calculated on the basis of direct labour hours. Show calculations. a) The Total Cost for Operating Department B, after service department cost allocations are made using the direct method, is (3 marks) b) The predetermined overhead rate that would be used in Operating Department B would be: (2 marks)

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