Hobart Manufacturing has the following overhead costs in their four departments.Inspection and Tech Support are the service departments,while Mixing and Fabricating are the production departments.There is currently $20 000 in Inspection overheads,$35 000 in Tech Support overheads,$70 000 in Mixing overheads and $80 000 in Fabricating overheads.
$\begin{array}{lllrr}
&\text { HR }& \text {Maintenance}&\text { Mixing}&\text { Fabricating }\
\text { Inspections } & 30 & 100 &120 & 80 \
\text { Machine hours } & 200 & 30 & 350 & 150
\end{array}$

Inspection overheads are allocated to production departments using number of inspections,while Tech Support overheads are allocated to production departments using support hours.The company has decided to use the direct method to allocate overhead costs to the production departments.
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?

Question

Hobart Manufacturing has the following overhead costs in their four departments.Inspection and Tech Support are the service departments,while Mixing and Fabricating are the production departments.There is currently $20 000 in Inspection overheads,$35 000 in Tech Support overheads,$70 000 in Mixing overheads and $80 000 in Fabricating overheads.
 $\begin{array}{lllrr}
&\text { HR }& \text {Maintenance}&\text { Mixing}&\text { Fabricating }\
\text { Inspections  } & 30 & 100 &120 & 80 \
\text { Machine hours } & 200 & 30 & 350 & 150
\end{array}$
 
Inspection overheads are allocated to production departments using number of inspections,while Tech Support overheads are allocated to production departments using support hours.The company has decided to use the direct method to allocate overhead costs to the production departments.
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?

Quizplus · Accepted Answer

The Answer of Hobart Manufacturing has the following overhead costs in their four departments.Inspection and Tech Support are the service departments,while Mixing and Fabricating are the production departments.There is currently $20 000 in Inspection overheads,$35 000 in Tech Support overheads,$70 000 in Mixing overheads and $80 000 in Fabricating overheads.
 $\begin{array}{lllrr}
&\text { HR }& \text {Maintenance}&\text { Mixing}&\text { Fabricating }\
\text { Inspections  } & 30 & 100 &120 & 80 \
\text { Machine hours } & 200 & 30 & 350 & 150
\end{array}$
 
Inspection overheads are allocated to production departments using number of inspections,while Tech Support overheads are allocated to production departments using support hours.The company has decided to use the direct method to allocate overhead costs to the production departments.
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?

Hobart Manufacturing Has the Following Overhead Costs in Their Four