Following is not allocated in the ratio of number of employees -------------
Answers
How to Calculate Overhead Allocation
Add up total overhead. ...
Compute the overhead allocation rate by dividing total overhead by the number of direct labor hours. ...
Apply overhead by multiplying the overhead allocation rate by the number of direct labor hours needed to make each product.
Answer:
The direct method allocates costs of each of the service departments to each operating department based on each department’s share of the allocation base. Services used by other service departments are ignored. This means the direct method does not recognize service performed by other service departments. For example, if Service Department A uses some of Service Department B’s services, these services would be ignored in the cost allocation process. Because these services are not allocated to other service departments, some accountants
believe the direct method is not accurate.
Step-by-step explanation:
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