Determine the departmental overhead rate

Reference no: EM132768092

Problem - Departmental OH rate after allocation of service cost

Nissan Manila is developing departmental overhead rates based on direct lab hours for its two production departments, Assembly and Finishing after service costs are distributed. The Assembly Department employs 20 people and 8 people for Finishing Department. Each person in these two departments work 2,000 hours per year. The direct overhead costs for the Assembly Department are budgeted at P2,040,000 while the Finishing Department costs are budgeted at P3,200,000. Two service departments, Repair and Power, support the two production departments and have budgeted costs of P480,000 and P1,250,000, respectively. The following data shown below reflect the usage of Repair and Power Department:

Departments	Services provided by
Departments	Repair Department	Power Department
Assembly Department	1,000 hours	840,000 KWH
Finishing Department	8,000 hours	120,000 KWH
Repair Department	-	240,000 KWH
Power Department	1,000 hours	-

Required - Determine the Departmental Overhead rate assuming the service department costs is allocated using

1. Direct method.

2. Step method

3. Algebraic method

Reference no: EM132768092

Questions Cloud

Importance of regular expressions in data analytics : What is the importance of regular expressions in data analytics? Also, discuss the differences between the types of regular expressions.

Target are collecting and using consumer data : Analyze the role of data in business by explaining how companies like Walmart and Target are collecting and using consumer data

Calculate the sample volumes for each of the samples : Calculate the sample volumes for each of the samples. The laboratory reports that the front section of Sample 1 contains 5,000 µg of methyl n-amyl ketone.

The results of enterprise risk management : How can computer engineers educate decision makers on the results of enterprise risk management after performing an analysis on a system

Determine the departmental overhead rate : Determine the Departmental Overhead rate assuming the service department costs is allocated using Direct method and Step method

Discuss why organizations are moving to cloud : Explain why information silos are a problem for organizations. Discuss why organizations are moving to the cloud.

Managed all business processes : When you started your small business, you managed all business processes on your own. Now, your business is expanding and you have hired employees to help.

Managerial issues of networked organization : Research at least two articles on the topic of managerial issues of a networked organization.

Threat modeling : Threat modeling for privacy issues is an emergent and important area. Much like security threats violate a required security property,

User Account

All Pages