Solved

Perth Manufacturing Has the Following Overhead Costs in Their Four

Question 60

Essay

Perth Manufacturing has the following overhead costs in their four departments.Quality Control and Maintenance are the service departments,while Mixing and Fabricating are the production departments.There is currently $20 000 in Quality Control overheads,$56 000 in Maintenance overheads,$60 000 in Mixing overheads and $80 000 in Fabricating overheads.
 Quality control Maintenance Mixing Fabricating  Inspections 205050150 Machine hours 10030200400\begin{array}{lllrr}&\text { Quality control }& \text {Maintenance}&\text { Mixing}&\text { Fabricating }\\\text { Inspections } & 20 & 50 & 50 & 150 \\\text { Machine hours } & 100 & 30 & 200 & 400\end{array}

Quality Control overheads are allocated to production departments using the number of inspections,while Maintenance overheads are allocated to production departments using machine hours.The company has decided to use the step-down method to allocate overhead costs to the production departments.The Quality Control department is allocated first.
Required:
A.How much overhead is allocated to the production departments from the service departments?
B.What is the total overhead in the production departments after the re-allocation?

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents