Delille Company manufactures both traditional toothpaste and geltoothpaste, with

Question

Delille Company manufactures both traditional toothpaste and geltoothpaste, with each type of toothpaste produced in separatedepartments. Three support departments support the productiondepartments: power, general factory, and personnel. Budgeted dataon the five departments are as follows:

The company does not break overhead into fixed and variablecomponents. The bases for allocation are: power-machine hours,general factory-square feet, and personnel-number of employees.

You may use the attached spreadsheet to solve this activity. Youwill find the spreadsheet by clicking on the paper clip found inthe upper left hand corner of the screen.

Support Departments Producing Departments Power General Factory Personnel Traditional Gel Overhead $90,000 $300,000 $120,000 $137,500 $222,500 Machine hours - 1,403 1,345 8,000 24,000 Square feet 3,600 - 2,400 10,800 7,200 Number of employees 8 13 7 18 14

Explanation / Answer

Personnel Power General Factory Traditional Gel Overhead Cost before Allocation $120,000 $90,000 $300,000 $137,500 $222,500 Personnel dept. Allocation Base - 8 13 18 14 Personnel department cost allocation ($120,000) $18,113 $29,434 $40,755 $31,698 Power dept. Allocation Base - - 1,403 8,000 24,000 Power dept. cost allocation - ($108,113) $4,541 $25,893 $77,679 General Factory dept. Allocation Base - - 10,800 7,200 General Factory dept. cost allocation - - ($364,378) $218,627 $145,751 Total Cost after allocation 0 0 0 Personnel Power General Factory Traditional Gel Overhead Cost before Allocation $120,000 $90,000 $300,000 $137,500 $222,500 Personnel dept. Allocation Base - 8 13 18 14 Personnel department cost allocation ($120,000) $18,113 $29,434 $40,755 $31,698 Power dept. Allocation Base - - 1,403 8,000 24,000 Power dept. cost allocation - ($108,113) $4,541 $25,893 $77,679 General Factory dept. Allocation Base - - 10,800 7,200 General Factory dept. cost allocation - - ($364,378) $218,627 $145,751 Total Cost after allocation 0 0 0

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