Solution-What is the overhead rate for production

What is the overhead rate for production department a

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Reference no: EM132562433

Simple Industries uses support departments - Factory Management and Quality Control - for production departments - A and B. There are total budgeted overhead costs of $100,000 for factory management, $140,000 for Quality Control, $2000 for Production Department A and $8000 for Production Department B. Production Department A has 20 employees and is expected to have 2000 quality inspections. Production Department B has 80 employees and is expected to have 18,000 quality inspections. Production Department A has an expected usage of 225 machine hours during the period while Department B has an expected usage of 900 hours during the period.

Factory management overhead is allocated based on the number of employees, quality control overhead is allocated based on quality inspections and overhead is allocated from production departments based on machine hours.

Question 1: What is the overhead rate for Production Department A using the direct method?

Reference no: EM132562433

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What is the overhead rate for production department a

Reference no: EM132562433

Reference no: EM132562433

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