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Jasmine Co: Direct Method and Support Department Allocations

Jasmine Company manufactures both pesticide and liquid fertilizer, with each product manufactured in separate departments. Three support departments support the production departments: Power, General Factory, and Purchasing. Budgeting data on the five departments are as follows:

Support Production
Power Gen Fact Purch Pest L. Fert Total
OH $90,000 $314,000 $167,000 $78,900 $107,800
sq ft 1,500 1,500 4,200 4,800 9,000
mach hr 1,403 1,345 24,000 8,000 32,000
orders 20 40 7 120 60 180
allocation base mach hr sq feet orders

The company does not break overhead into fixed and variable components. The bases for allocation are power-machine hours; general factory-square feet; and purchasing-purchase orders.

1. Allocate the overhead costs to the producing departments using the direct method. If required, round your answers to four decimal places.

2. Using machine hours, compute departmental overhead rates. If required, round your answers to the nearest cent.


Solution Summary

Your guidance is attached. Click in cells to see computations. The layout gives you the steps.