Business, 31.03.2021 03:50 bgallman153p71edg
Alliance Manufacturing Company has two support departments, Maintenance Department and Personnel Department, and two producing departments, X and Y. The Maintenance Department costs of $90,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $13,500 are allocated on the basis of number of employees. The direct costs of Departments X and Y are $27,000 and $45,000, respectively.
Data on standard service hours and number of employees are as follows:
Maint. Person. Dept. Dept.
Dept. Dept. X Y
Standard service hours used 200 150 1,200 600
Number of employees 25 50 Â Â Â 75 75
Direct labor hours 250 250 1,000 500
Predetermined overhead rates for Departments X and Y, respectively, are based on direct labor hours. What is the overhead rate for Department X assuming the direct method is used?
a. $27.00
b. $81.00
c. $46.88
d. $93.75
Answers: 3
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