Reference no: EM132510554

Kelsie Manufacturing Ltd has two support departments (Personnel and Janitorial) that provides services to two manufacturing departments (Assembly and Finishing).

The Personnel Department cost is allocated based on employees and the Janitorial Department cost is allocated based on space.

The following information is available.

User of Services Support

                   Departments Manufacturing        Departments Janitorial        Personnel Assembly        Finishing
Budgeted cost (3)  10, 000                              45, 000                       130, 000                             210, 000
No. of employees    15                                        5                               25                                       60
Space [sq m)          -                                     6, 000                                 45, 000 49, 000
Direct labor hours      40, DOB                    
Machine hours     30, 000

Problem 1: Using the step-down method, calculate the total cost that is allocated out from the Janitorial Department.

Problem 2: What is the total budgeted overhead cost of the Finishing department that is used to compute its departmental overhead rate? Please round your answer to the nearest dollar.