Please answer complete question please answer within the format by providing formula the detailed working Please provide answer in text (Without image) Please provide answer in text (Without image) Please provide answer in text (Without image) Sunflower Company has budgeted the following costs of the various department in the company: Factory administrative $ 270,000,000 Surveillance services 68,760,000 Personnel 28,840,000 Maintenance 45,200,000 Machining – Overhead 376,300,000 Assembly - Overhead 175,900,000 Total 965,000,000 Machining and Assembly are production departments; the other departments are service departments. Factory administrative costs are allocated based on total labour hours; Surveillance Services costs based space occupied; Personnel costs based on number of employees and Maintenance cost based on machine hours. The company allocated the service department costs to another department according to the following steps: Department No. of employees Total labour hours Space occupied (square feet) Total direct labour (hours) Machine Hours Factory administrative 12 - 5,000 - - Surveillance services 4 3,000 2,000 - - Personnel 5 5,000 3,000 - - Maintenance 25 22,000 10,000 - - Machining – Overhead 40 30,000 70,000 20,000 70,000 Assembly - Overhead 60 90,000 20,000 80,000 10,000 Total 146 150,000 110,000 100,000 80,000 Required (Preferably using Excel) : a) Calculate the single plant wide overhead rate using direct labour hours as basis of allocation. b) Allocate service departments costs to production departments using direct method. c) Allocate service departments costs to production departments using step method. d) Explain why step method provides a better overhead rate calculation compared to direct method.
Please answer complete question please answer within the format by providing formula the detailed working Please provide answer in text (Without image) Please provide answer in text (Without image) Please provide answer in text (Without image) Sunflower Company has budgeted the following costs of the various department in the company: Factory administrative $ 270,000,000 Surveillance services 68,760,000 Personnel 28,840,000 Maintenance 45,200,000 Machining – Overhead 376,300,000 Assembly - Overhead 175,900,000 Total 965,000,000 Machining and Assembly are production departments; the other departments are service departments. Factory administrative costs are allocated based on total labour hours; Surveillance Services costs based space occupied; Personnel costs based on number of employees and Maintenance cost based on machine hours. The company allocated the service department costs to another department according to the following steps: Department No. of employees Total labour hours Space occupied (square feet) Total direct labour (hours) Machine Hours Factory administrative 12 - 5,000 - - Surveillance services 4 3,000 2,000 - - Personnel 5 5,000 3,000 - - Maintenance 25 22,000 10,000 - - Machining – Overhead 40 30,000 70,000 20,000 70,000 Assembly - Overhead 60 90,000 20,000 80,000 10,000 Total 146 150,000 110,000 100,000 80,000 Required (Preferably using Excel) : a) Calculate the single plant wide overhead rate using direct labour hours as basis of allocation. b) Allocate service departments costs to production departments using direct method. c) Allocate service departments costs to production departments using step method. d) Explain why step method provides a better overhead rate calculation compared to direct method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please answer complete question
please answer within the format by providing formula the detailed working
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Sunflower Company has budgeted the following costs of the various department in the company:
| Factory administrative | $ 270,000,000 |
| Surveillance services | 68,760,000 |
| Personnel | 28,840,000 |
| Maintenance | 45,200,000 |
| Machining – Overhead | 376,300,000 |
| Assembly - Overhead | 175,900,000 |
| Total | 965,000,000 |
Machining and Assembly are production departments; the other departments are service departments. Factory administrative costs are allocated based on total labour hours; Surveillance Services costs based space occupied; Personnel costs based on number of employees and Maintenance cost based on machine hours. The company allocated the service department costs to another department according to the following steps:
| Department |
No. of employees |
Total labour hours |
Space occupied (square feet) |
Total direct labour (hours) |
Machine Hours |
| Factory administrative | 12 | - | 5,000 | - | - |
| Surveillance services | 4 | 3,000 | 2,000 | - | - |
| Personnel | 5 | 5,000 | 3,000 | - | - |
| Maintenance | 25 | 22,000 | 10,000 | - | - |
| Machining – Overhead | 40 | 30,000 | 70,000 | 20,000 | 70,000 |
| Assembly - Overhead | 60 | 90,000 | 20,000 | 80,000 | 10,000 |
| Total | 146 | 150,000 | 110,000 | 100,000 | 80,000 |
Required (Preferably using Excel) :
a) Calculate the single plant wide overhead rate using direct labour hours as basis of allocation.
b) Allocate service departments costs to production departments using direct method.
c) Allocate service departments costs to production departments using step method.
d) Explain why step method provides a better overhead rate calculation compared to direct method.
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VIEWStep 3: Allocating service departments costs to production departments using direct method
VIEWStep 4: Allocate service departments costs to production departments using step method
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