Question Description

Stubing Company has two producing departments and two support centers. The following budgeted data pertain to these four departments:

Required:

1. Allocate the overhead costs of the support departments to the producing departments using the reciprocal method.

2. Using direct labor hours, compute departmental overhead rates.

Refer to the data. 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.

2. Using direct labor hours, compute departmental overhead rates.