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Question - Kelsie Manufacturing Ltd has two support departments (Personnel and Janitorial) that provides services to two manufacturing departments (Assembly and Finishing). The Personnel Department cost is allocated based on employees and the Janitorial Department cost is allocated based on space. The following information is available.
User of Services
Support Departments
Manufacturing Departments
Janitorial
Personnel
Assembly
Finishing
Budgeted cost ($)
15,000
45,000
190,000
280,000
No. of employees
5
35
60
Space (sq m)
-
21,000
34,000
Direct labor hours
40,000
Machine hours
30,000
Question 1 - Using the step-down method, calculate the total cost that is allocated out from the Janitorial Department. Please round your answer to the nearest dollar.
Question 2 - What is the total budgeted overhead cost of the Finishing department that is used to compute its departmental overhead rate? Please round your answer to the nearest dollar.
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