Reference no: EM132510554
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 (3) 10, 000 45, 000 130, 000 210, 000
No. of employees 15 5 25 60
Space [sq m) - 6, 000 45, 000 49, 000
Direct labor hours 40, DOB
Machine hours 30, 000
Problem 1: Using the step-down method, calculate the total cost that is allocated out from the Janitorial Department.
Problem 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.