Newton Company has two support departments, Maintenance Dept (MD) and Personnel Dept (PD), and two production...
Newton Company has two support departments, Maintenance Dept
(MD) and Personnel Dept (PD), and two production depts, P1 and P2.
The MD cost driver is service hours. The PD cost driver is
employees. The cost driver in the production depts is direct labor
hours (DLH). Plan data is shown below. What is the OHD rate in P1
using the direct method?
MD PD P1 P2
service hours used -- 200 1,200 600
employees 20 40 180 180
DLH (000s) -- -- 20 30
cost (000s) $120 $18 $36 $60
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