Problem related to reciprocal method

Reference no: EM13157919

Kumar Company has two producing departments and two support centers. The following budgeted data pertain to these four departments

Support department producing department

Maintenance personnel assembly painting

Overhead $200,000 $60,000 $43,000 $74,000

Square footage ---- 2,700 5,400 5,400

Number of employees 30 ---- 72 198

Direct labor ---- ---- 25,000 40,000

Required:

1. Allocate the overhead costs of the support departments to the producing departments using the reciprocal method. Bases for allocation are: maintenance-square footage, personnel- number of employees. (round to the nearest dollar)

2. Using direct labor hours, compute departmental overhead rates for the two producing departments. (round to the nearest cent)

Reference no: EM13157919

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