BizApp is a software development company that writes specialized programs for businesses. The founder and owner John Sprat runs the business on a "bare bones" philosophy, by reducing or eliminating unneeded activities in the company. As such, BizApp has only two departments (both of them classified as production departments): Design and Production.
Budgeted yearly information for these departments is as follows:
Design: 800 square feet; 6,000 direct labor hours, at $35/hour
Production: 1,600 square feet; 4,000 direct labor hours, at $25/hour
BizApp budgeted for the following overhead costs this year:
Rent and utilities are allocated to each department based on square footage, and other overhead costs are allocated based on direct labor hours. Design and Production overhead costs are allocated to jobs based on direct labor hours.
What is the rate used to apply overhead to jobs in the Design department? In the Production department? (Do not round intermediate calculations; round final answer to 2 decimal places.)

Question

BizApp is a software development company that writes specialized programs for businesses. The founder and owner John Sprat runs the business on a "bare bones" philosophy, by reducing or eliminating unneeded activities in the company. As such, BizApp has only two departments (both of them classified as production departments): Design and Production. 
Budgeted yearly information for these departments is as follows:
Design: 800 square feet; 6,000 direct labor hours, at $35/hour
Production: 1,600 square feet; 4,000 direct labor hours, at $25/hour
BizApp budgeted for the following overhead costs this year:
  Rent and utilities are allocated to each department based on square footage, and other overhead costs are allocated based on direct labor hours. Design and Production overhead costs are allocated to jobs based on direct labor hours.
What is the rate used to apply overhead to jobs in the Design department? In the Production department? (Do not round intermediate calculations; round final answer to 2 decimal places.)

Quizplus · Accepted Answer

The Answer of BizApp is a software development company that writes specialized programs for businesses. The founder and owner John Sprat runs the business on a "bare bones" philosophy, by reducing or eliminating unneeded activities in the company. As such, BizApp has only two departments (both of them classified as production departments): Design and Production. 
Budgeted yearly information for these departments is as follows:
Design: 800 square feet; 6,000 direct labor hours, at $35/hour
Production: 1,600 square feet; 4,000 direct labor hours, at $25/hour
BizApp budgeted for the following overhead costs this year:
  Rent and utilities are allocated to each department based on square footage, and other overhead costs are allocated based on direct labor hours. Design and Production overhead costs are allocated to jobs based on direct labor hours.
What is the rate used to apply overhead to jobs in the Design department? In the Production department? (Do not round intermediate calculations; round final answer to 2 decimal places.)

BizApp Is a Software Development Company That Writes Specialized Programs