Practical Printing is a company that contracts with book publishers to produce the physical books that are then sold to stores. They provide printing services at a lower price than it costs the publishers to print the books, and have been able to capture a significant market share.
The company budgeted the following costs for the period:
Practical Printing has two service departments (Materials Handling and Maintenance) and two production departments (Printing and Binding). Budgeted yearly information for these departments is as follows:
Materials Handling: 2,400 square feet; 3000 labor hours, at $40/hour
Maintenance: 200 square feet; 500 labor hours, at $50/hour
Printing: 4,000 square feet; 10,000 direct labor hours, at $30/hour; 10,000 machine hours
Binding: 1,400 square feet; 6,000 direct labor hours, at $30/hour; 2,000 machine hours
Rent and utilities are allocated to each department based on square footage. Maintenance costs are allocated based on machine hours, and Materials Handling costs are allocated based on direct labor hours. Printing costs are allocated to jobs based on direct labor hours, and Binding costs are allocated based on machine hours.
What is the rate used to apply overhead to jobs in the Printing department? To the Binding department? (Do not round intermediate calculations; round final answer to 3 decimal places.)

Question

Practical Printing is a company that contracts with book publishers to produce the physical books that are then sold to stores. They provide printing services at a lower price than it costs the publishers to print the books, and have been able to capture a significant market share. 
The company budgeted the following costs for the period:
  Practical Printing has two service departments (Materials Handling and Maintenance) and two production departments (Printing and Binding). Budgeted yearly information for these departments is as follows:
Materials Handling: 2,400 square feet; 3000 labor hours, at $40/hour
Maintenance: 200 square feet; 500 labor hours, at $50/hour
Printing: 4,000 square feet; 10,000 direct labor hours, at $30/hour; 10,000 machine hours
Binding: 1,400 square feet; 6,000 direct labor hours, at $30/hour; 2,000 machine hours
Rent and utilities are allocated to each department based on square footage. Maintenance costs are allocated based on machine hours, and Materials Handling costs are allocated based on direct labor hours. Printing costs are allocated to jobs based on direct labor hours, and Binding costs are allocated based on machine hours.
What is the rate used to apply overhead to jobs in the Printing department? To the Binding department? (Do not round intermediate calculations; round final answer to 3 decimal places.)

Quizplus · Accepted Answer

The Answer of Practical Printing is a company that contracts with book publishers to produce the physical books that are then sold to stores. They provide printing services at a lower price than it costs the publishers to print the books, and have been able to capture a significant market share. 
The company budgeted the following costs for the period:
  Practical Printing has two service departments (Materials Handling and Maintenance) and two production departments (Printing and Binding). Budgeted yearly information for these departments is as follows:
Materials Handling: 2,400 square feet; 3000 labor hours, at $40/hour
Maintenance: 200 square feet; 500 labor hours, at $50/hour
Printing: 4,000 square feet; 10,000 direct labor hours, at $30/hour; 10,000 machine hours
Binding: 1,400 square feet; 6,000 direct labor hours, at $30/hour; 2,000 machine hours
Rent and utilities are allocated to each department based on square footage. Maintenance costs are allocated based on machine hours, and Materials Handling costs are allocated based on direct labor hours. Printing costs are allocated to jobs based on direct labor hours, and Binding costs are allocated based on machine hours.
What is the rate used to apply overhead to jobs in the Printing department? To the Binding department? (Do not round intermediate calculations; round final answer to 3 decimal places.)

Practical Printing Is a Company That Contracts with Book Publishers