The overhead rate for the Machining Department is based upon 10,000 machine hours

	Support Dept.		Operating Dept.
	Engineering & Production Control	Materials Management	Machining	Assembly	Total Budget
Overhead Budget Before Allocation	300,000	250,000	336,000	234,000	1,120,000


Engineering & Production Control
Salaries		36,000	60,000	24,000	120,000
Percentage		30%	50%	20%	100%

Material Management	400		800	2800	4000
	10%		20%	70%	100%



Manufacturing Overhead Costs = 1,120,000
The overhead rate for the Machining Department is based upon 10,000 machine hours. The overhead rate for the Assembly Department is based upon 20,000 direct labor hours.
Allocate costs using the direct method
Calculate direct labor hours or machine hours for the four departments.

ACC Solution - Calculations with three methods

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