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Direct Method Eilers Company has two producing departments and two support departments. The following budgeted...

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Accounting

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Direct Method Eilers Company has two producing departments and two support departments. The following budgeted data pertain to these four departments: Producing Departments Support Departments General Factory Receiving Finishing Assembly $43,000 Direct overhead $400,000 $160,000 $74,000 5,400 Square footage Number of receiving orders 2,700 - 5,400 1,680 1,020 Direct labor hours - 25,000 40,000 The company has decided to simplify its method of allocating support service costs by switching to the direct method. Required: 1. Allocate the costs of the support departments to the producing departments using the direct method. Round allocation ratios to four significant digits. Round allocated costs to the nearest dollar. Use the rounded values for subsequent calculations. Allocation ratios: Assembly 0.4 x 0.56 x Finishing 0.4 x Square footage Number of receiving orders Square footage 0.4 x 0.4 X Number of receiving orders 0.56 x Allocations: Assembly Finishing General Factory Receiving Direct costs Total 2. Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.) Overhead Rate Assembly 14 X per direct labor hour Finishing 8.18 X per direct labor hour Frack

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