Ferndale Corp Required:
A

question 52

Essay

Ferndale Corp. is developing departmental overhead rates based on direct labour hours for its two production departments, Molding and Assembly. The Molding Department worked 20,000 hours during the period just ended, and the Assembly Department worked 40,000 hours. The overhead costs incurred by Molding and Assembly were $151,250 and $440,750, respectively.
Two service departments, Repair and Power, directly support the two production departments and have costs of $90,000 and $250,000, respectively. The following schedule reflects the use of Repair and Power's output by the various departments:
$\begin{array}{lccc}&\underline { \text { Repair } }&\underline { \text { Power } }&\underline { \text { Molding } }&\underline { \text { Assembly } }\\ \text { Repair (repair hours) } & &500 & 500 & 4,000 \\ \text { Power (kilowatt hours) } & 120,000 && 420,000 & 60,000\end{array}$
Required:
A. Allocate the company's service department costs to production departments by using the direct method.
B. Calculate the overhead application rates of the production departments. Hint: Consider both directly traceable and allocated overhead when deriving your answer.
C. Allocate the company's service department costs to production departments by using the step-down method. Begin with the Power Department, and round calculations to the nearest dollar.

---

Definitions:

Social Learning

A theory that suggests people can learn new behaviors and norms through observing and imitating others.

Gender Inequality

The unequal treatment or perceptions of individuals based on their gender, manifesting in various aspects of social, economic, and political life.

Intellectual Quality

The caliber of thought, creativity, and understanding embedded in an idea, work of art, or argument.

Gender Role Socialization

The process through which individuals learn the gender norms and behaviors typically associated with their sex, guided by societal expectations.