Compute the overhead allocation rates for each department

Reference no: EM13902730

Allocating overhead to departments and jobs. The accountants of Meridian Production Company, a company that makes television commercials, made the following estimates for a year:

	Filming Department	Editing Department	Printing Department
Estimated Overhead	$66,000	$100,000	$120,000
Estimated Direct Labor Time	5,500 Hours	6,250 Hours	6,000 Hours

a. Compute the overhead allocation rates for each department using direct labor hours as a basis.

b. Management wants to know how much the Toyota commercial job cost. The following table shows the materials and labor costs; you will have to add the overhead costs using direct labor hours as the allocation base.

Toyota Commercial	Filming Department	Editing Department	Printing Department
Direct Material Cost	$1,200	-	$160
Direct Labor Cost	$3,000	$4,000	$400
Direct Labor Time	250 Hours	400 Hours	38 Hours

Reference no: EM13902730

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