Reference no: EM133158421

Question - The list of accounts below are from financial statements of the Mercy Hospital on December 31, 20X9. Please reassemble the accounts and prepare (1) a balance sheet and (2) statement of operations as of December 31, 20X9.

Givens (thousand):

Sarah Jane's Fashion uses the departmental approach to allocate factory overhead costs.

Expected total overhead costs $800,000

Expected overhead costs in cutting $100,000

Expected overhead costs in sewing $700,000

Total expected annual direct labor costs $300,000

Expected machine hours (for cutting) 100,000

Expected direct labor hours (for sewing) 200,000

Required - Calculate the rate used by each department to allocate overhead costs.

a. Cutting: $1.00 per machine hour; Sewing: $3.50 per direct labor hour

b. Cutting: $5.00 per machine hour; Sewing: $4.00 per direct labor hour

c. Cutting: $8.00 per machine hour; Sewing: $0.50 per direct labor hour

d. Cutting: $16.00 per machine hour; Sewing: $8.00 per direct labor hour