80.2K

Verified Solution

Link Copied!

The following budgeted information pertains to Olsen Company:

	Human Resources	Facilities	Mixing	Molding
Direct department costs	$80,000	$40,000	$280,000	$540,000
Direct labor hours	5,000	3,000	9,000	27,000
Square footage	2,000	3,000	10,500	17,500
# of Employees	4	5	11	9

Mixing and Molding are the production departments. Human Resource Department costs are assigned to other departments based on the number of employees, and Facilities Department costs are assigned to other departments based on square footage occupied. Direct department costs include raw materials, direct labor, and overhead other than the human resources and facilities costs.

Question 4

Not yet answered

Points out of 6.00

Flag question

Question text

Using the direct method, assign the service department costs to the production departments ndicate the fractions/percentages you used to allocate each of the service departments. Label the final cost for the production departments carefully.

B. Once the service department costs are allocated to the production departments, predetermined application rates are set for the two production departments using direct labor hours as the cost driver. Calculate those two predetermined overhead rates using the cost totals you calculated in the previous question.

C.

An order of 100 units of product has been completed accumulating the following costs:

Direct labor cost $12 per hour

Direct Labor Hours 20 min. per unit in Mixing; 1 hour per unit in Molding

Calculate the total non-direct cost of this completed order.

Remember to use the predetermined rates that you calculated in the previous question.

Answer & Explanation Solved by verified expert

See Answer