Morton Manufacturing Company has two support departments, Maintenance Department and Personnel Department, and two producing...
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Accounting
Morton 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:
Maint.
Person.
Dept.
Dept.
Dept.
Dept.
X
Y
Standard service hours used
200
150
1,200
600
Number of employees
25
50
75
75
Direct labor hours
250
250
1,000
500
Predetermined overhead rates for Departments X and Y, respectively, are based on direct labor hours. What is the overhead rate for Department X assuming the direct method is used?
Select one:
a. $27.00
b. $81.00
c. $46.88
d. $93.75
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