Question

Jasmine Company manufactures both pesticide and liquid fertilizer, with each product manufactured in separate departments. Three support departments support the production departments: Power, General Factory, and Purchasing. Budgeted data on the five departments are as follows:

	Support Departments			Producing Departments
	Power	General Factory	Purchasing	Pesticide	Liquid Fertilizer
Overhead	$90,000	$314,000	$167,000	$78,900	$107,800
Square feet	1,500	—	1,500	4,200	4,800
Machine hours	—	1,403	1,345	24,000	8,000
Purchase orders	20	40	7	120	60

The bases for allocation are power—machine hours; general factory—square feet; and purchasing—purchase orders.

1. Allocate the overhead costs to the producing departments using the reciprocal method in Excel. (Round allocation ratios out to four significant digits.)

2. Using machine hours, compute departmental overhead rates. (Round the overhead rates to the nearest cent).

Answer 1