Texts: Spacely Corp. makes sprockets in two models: regular and professional and wants to refine its costing system by allocating overhead using departmental rates. The estimated $846,100 of manufacturing overhead has been divided into two cost pools: Assembly Department and Packaging Department.
The following data has been compiled:
Spacely Corp.
Assembly Department Packaging Department Total
Overhead costs $553,000 $293,100 $846,100
Machine Hours:
Regular Model 135,000 34,700 169,700
Professional Model 361,200 11,200 372,400
Direct Labor Hours:
Regular Model 39,900 79,700 119,600
Professional Model 312,100 420,400 732,500
(Round your answers to two decimal places when needed and use rounded answers for all future calculations).
1. Compute the predetermined overhead allocation rates using machine hours as the allocation base for the Assembly Department and direct labor hours for the Packaging Department.
Model Assembly Dept. Units Packaging Dept. Units
Regular Model MHr DLHr
Professional Model MHr DLHr
Total MHr DLHr
Total Department estimated overhead cost
Total estimated quantity of the overhead allocation base
Predetermined Overhead Allocation Rate (Per Machine Hour)
Assembly Department Department Packaging Department
Predetermined Assembly Overhead Department Allocation Rate
Actual Quantity of the Allocation Base Used
Allocated Manufacturing Overhead Cost
Regular Model Professional Model
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=
Total Manufacturing Overhead Costs
Predetermined Packing Overhead Department Allocation Rate
Actual Quantity of the Allocation Base Used
Allocated Manufacturing Overhead Cost
Regular Model Professional Model
Total Manufacturing Overhead Costs
2. How much overhead is allocated to the basic model? To the professional model?
Manufacturing Overhead
Regular Model Professional Model
Assembly Department Packaging Department
Total Manufacturing Overhead Costs
