Direct Method
Eilers Company has two producing departments and two supportdepartments. The following budgeted data pertain to these fourdepartments:
| Support Departments | Producing Departments |
| General Factory | Receiving | Assembly | Finishing |
| Direct overhead | $470,000 | $180,000 | $48,000 | $76,000 |
| Square footage | — | 2,000 | 4,000 | 4,000 |
| Number of receiving orders | 370 | — | 1,600 | 1,500 |
| Direct labor hours | — | — | 26,000 | 50,000 |
The company has decided to simplify its method of allocatingsupport service costs by switching to the direct method.
Required:
1. Allocate the costs of the supportdepartments to the producing departments using the direct method.Round allocation ratios to four significant digits. Round allocatedcosts to the nearest dollar. Use the rounded values for subsequentcalculations.
Allocation ratios:
| Assembly | Finishing |
| Square footage | | |
| Number of receiving orders | | |
| |
| Allocations: |
| Assembly | Finishing |
| General Factory | $ | $ |
| Receiving | | |
| Direct costs | | |
| Total | $ | $ |
2. Using direct labor hours, computedepartmental overhead rates. (Round to the nearest cent.)
| Overhead Rate |
| Assembly | per direct labor hour |
| Finishing | per direct labor hour |
