Yole Incorporated Has Two Service Departments (Accounting and Human Resources)

Yole Incorporated has two service departments (Accounting and Human Resources) and two production departments (Design and Finishing). The company uses the direct method of service-department cost allocation, allocating Accounting cost on the basis of square footage and Human Resources cost on the basis of number of employees. Budgeted allocation-base and operating data for the four departments are as follows.
$\begin{array} { l c l l l } & {\text { Accounting }} & {\text { Human }} & & \\& & \underline{ \text { Resources } }& \underline{ \text { Design } } & \underline{\text { Finishing } }\\\text { Square feet } & 4,000 & 2,000 & 50,000 & 60,000 \\\text { Employees } & 25 & 20 & 140 & 160 \\\text { Machine hours } & 200 & { \cdots } & 80,000 & 20,000 \\\text { Labor hours } & 45,000 & 25,000 & 100,000 & 150,000\end{array}$ Additional information:
Budgeted costs of Accounting and Human Resources respectively amount to $2,240,000 and $1,500,000.
The anticipated overhead costs incurred directly in the Design and Finishing Departments respectively total $3,840,000 and $3,340,000.
The manufacturing overhead application bases used by Yole's production departments are: Design, labour hours; Finishing, machine hours.
Yole's policy holds that a department's overhead application rate is based on a department's own overhead plus an allocated share of service-department cost.
Required:
A. Allocate the company's service-department costs to the producing departments.
B. Compute the overhead application rates for Design and Finishing.