Crow Company Applies Factory Overhead in Its Two Producing Departments $\quad$

question 88

Essay

Crow Company applies factory overhead in its two producing departments using a predetermined rate based on budgeted machine hours in the Mixing Department and based on budgeted labour hours in the Packaging Department.Variable cafeteria costs are allocated to the producing departments based on budgeted number of employees,and fixed costs are allocated based on the capacity number of employees.Variable maintenance costs are allocated on the budgeted number of direct labour hours,and fixed costs are allocated on labour hour capacity.The data concerning next year's operations are as follows:
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {Support Departments\quad\quadProducing Departments}$
$\begin{array}{lcccc}\text { Budgeted costs: } & \text { Cafeteria } & \text { Maintenance } & \text { Mixing } & \text { Packaging } \\ \text { Variable costs } & \$ 60,000 & \$ 84,000 & \$ 300,000 & \$ 324,000 \\ \text { Fixed costs } & 18.000 & 30.000 & 120.000 & 140.000 \\\end{array}$
$$\begin{array}{l}\text { Other data: }\\\begin{array} { l r r } \text { Direct labour hours (capacity) } & 10,000 & 20,000 \\\text { Direct labour hours (budgeted) } & 8,000 & 16,000 \\\text { Number of employees (capacity) } & 30 & 60 \\\text { Number of employees (budgeted) } & 20 & 40 \\\text { Machine hours (capacity) } & 33,000 & 66,000 \\\text { Machine hours (budgeted) } & 20,000 & 60,000\end{array}\end{array}$$
a.Prepare a schedule showing the allocation of budgeted support department costs to producing departments.
b.Determine the predetermined overhead rate for the producing departments.

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Definitions:

Personal Representative

The person designated by a testator to collect the testator’s property after he or she dies, pay the debts and taxes, and make sure the remainder of the estate gets distributed.

Beneficiaries

Individuals or entities designated to receive benefits or assets from a will, trust, insurance policy, or other legal instrument.

Undue Influence

The situation in which one person takes advantage of his or her dominant position in a relationship to unfairly persuade the other person and interfere with that person’s ability to make his or her own decision.

Testamentary Disposition

The distribution of an individual's property after death, as outlined in their will or testament.