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Information IT support costs are allocated to productive departments based on time of service while Rep&Maint...
Information IT support costs are allocated to productive departments based on time of service while Rep&Maint costs are allocated based on hours. Department IT support Rep&Maint Cutting Welding Total Departmental overhead $500,000 $1,000,000 $6,000,000 $2,500,000 $10,000,000 IT Time of service 50 40 600 360 1050 R&M hours 500 400 24,000 16,000 40,900 Cutting uses machine hours as a base for overhead allocation and expects to use 90,000 MH this year. Welding uses direct labor hours as a base for overhead allocation and expects to use 70,000 DLH this year. During the year, Job 70B is completed. The job required: Cutting Welding DLH 100 300 MH 350 120 Required: Part 1. a. Complete a cost allocation calculation/table using the step method starting with IT to put all overhead amounts into the productive departments. b. Calculate the predetermind overhead rates for the productive departments. c. Calculate the total overhead applied to Job 70B.
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