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1. Use the Direct Method to allocate Service Department Costs to the Operating Departments based on number (percentage) of employees.

Painting Dept = 40 employees

Welding Dept = 110 employees

	Service Dept. Maintenance	Service Dept. Cafeteria	Service Dept. Custodial	Operating Dept. Painting	Operating Dept. Welding
Dept costs before allocation	$390,000	$240,000	$175,000	$650,000	$990,000
Maintenance
Cafeteria
Custodial
Total after allocation

III. Estimated Data
	Fabrication		Painting	Assembly	Total
Total Mfg OH Costs	$290,000		$485,000	$350,000	1,125,000
Direct Labor Hrs	5,000		6,700	2,600	14,300
Direct Labor Costs	$110,000		$92,500	$75,800	278,300
Machine Hrs	11,500		8,900	9,100	29,500
Job K-0955	Fabrication		Painting	Assembly	Total
Direct Materials	$528		$709	$413	1,650
Direct Labor Cost	$750		$550	$636	1,936
Direct Labor Hours	41		33	56	130
Machine Hours	45		33	19	97

Blo-Blu Inc considers all its manufacturing overhead costs to be first costs. The above estimates were made at the beginning of the year for the expected total output. The second set of data relates to one particular job during the year.

Determine the cost of Job K-0955 if Blo-Blu uses a predetermined departmental overhead rate with machine hours as the allocation base for the Fabrication department, direct labor hours as the allocation base for the Painting department and direct labor costs as the allocation base for the Assembly department.

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