Glenwood Company applies factory overhead in its two producing departments using a predetermined rate based on budgeted machine hours in the Mixing Department and based on budgeted labor-hours in the Packaging Department. Variable cafeteria costs are allocated to the producing departments based on budgeted number of employees, and fixed costs are allocated based on the capacity number of employees. Variable maintenance costs are allocated on the budgeted number of direct labor-hours, and fixed costs are allocated on direct labor hour capacity.
The data concerning next year's operations are as follows:
Required:
a. Prepare a schedule showing a direct allocation of budgeted service department costs to producing departments.
b. Determine the predetermined overhead rate for the producing departments.

Question

Glenwood Company applies factory overhead in its two producing departments using a predetermined rate based on budgeted machine hours in the Mixing Department and based on budgeted labor-hours in the Packaging Department. Variable cafeteria costs are allocated to the producing departments based on budgeted number of employees, and fixed costs are allocated based on the capacity number of employees. Variable maintenance costs are allocated on the budgeted number of direct labor-hours, and fixed costs are allocated on direct labor hour capacity. 
The data concerning next year's operations are as follows:
  Required:
a. Prepare a schedule showing a direct allocation of budgeted service department costs to producing departments.
b. Determine the predetermined overhead rate for the producing departments.

Quizplus · Accepted Answer

The Answer of Glenwood Company applies factory overhead in its two producing departments using a predetermined rate based on budgeted machine hours in the Mixing Department and based on budgeted labor-hours in the Packaging Department. Variable cafeteria costs are allocated to the producing departments based on budgeted number of employees, and fixed costs are allocated based on the capacity number of employees. Variable maintenance costs are allocated on the budgeted number of direct labor-hours, and fixed costs are allocated on direct labor hour capacity. 
The data concerning next year's operations are as follows:
  Required:
a. Prepare a schedule showing a direct allocation of budgeted service department costs to producing departments.
b. Determine the predetermined overhead rate for the producing departments.

Glenwood Company Applies Factory Overhead in Its Two Producing Departments