Alliance Manufacturing Company Has Two Support Departments, Maintenance Department and Personnel

question 153

Multiple Choice

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: $\begin{array}{lcccc}&\text { Maint. } & \text { Person. } & \text { Dept. } & \text { Dept. } \\&\text { Dest. } & \text { Dept. } & \underline{X} & \underline{Y}\\\text { Standard service hours used } & 200 & 150 & 1,200 & 600 \\\text { Number of employees } & 25 & 50 & 75 & 75 \\\text { Direct labor hours } & 250 & 250 & 1,000 & 500\end{array}$
Predetermined overhead rates for Departments X and Y, respectively, are based on direct labor hours.
What is the overhead rate for Department Y assuming the direct method is used?

• A)$90.00
• B)$163.50
• C)$187.50
• D)$81.75

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Definitions:

X-Ray Studies

Medical imaging tests that use X-rays to view the internal structures of the body, helping in diagnosis and treatment planning.

Radiopaque

Impenetrable to the X-ray or other forms of radiation.

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Impossible to pass through or enter, often used to describe dense materials or abstract concepts like complex theories.

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The emission of energy as electromagnetic waves or as moving subatomic particles, especially high-energy particles that cause ionization.