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Question: a company has two support departments administration and janitorial and...

Question details

A Company has two support departments (Administration and Janitorial) and three producing departments (Fabricating, Assembly, and Finishing). Costs and activities are as follows:

                                         Administration      Janitorial       Fabricating       Assembly      Finishing

Direct costs........................      $50,000            $30,000         $40,000         $50,000         $25,000

Number of employees.......                                        10                  30                  40                  20

Square feet........................          2,000                                    10,000           28,000           15,000

Direct labor hours..............                                                         5,000             6,000             2,000

Administrative services are allocated based on the number of employees; janitorial services are allocated based on square footage. Overhead rates for the three producing departments are based on direct labor hours.

Required:

Determine the overhead application rates for the producing departments using each of the three allocation methods:

1.   Direct allocation method for the support departments

2.   Step allocation method for the support departments      

3.        Reciprocal allocation method for the support departments

Kindly reply in format in order for me to paste the information and this will greatly appreciated.

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