(Comprehensive service department allocations) Yolanda Company’s annual budget for its three service departments (administration, legal/accounting, and maintenance/engineering) and its two production departments (process¬ ing and finishing) follows:

a. Prepare a cost distribution that allocates service department costs using the step method. Assume the benefits-provided ranking is the order in which the departments are listed. The allocation bases for the service department are (1) administration: number of employees, (2) legal/ accounting: floor space, and (3) maintenance/engineering: number of hours. Calculate the factory overhead rates using 400,000 direct labor hours in processing and 300,000 direct labor hours in finishing.

b. Calculate the factory overhead rates per direct labor hour using the di¬ rect method.
C. Calculate the factory overhead rates per direct labor hour using the alge¬ braic method. LO.1

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ANNUAL BUDGET ($000 omitted) Legal/ Maint./ Admin. Acctg. Eng. Proc. Finish. Total Direct labor $ 700 $500 $ 900 $2,800 $2,000 $ 6,900 Direct material 70 200 90 400 1,200 1,960 Insurance 175 50 75 300 220 820 Depreciation Miscellaneous Total 90 70 80 200 150 590 30 20 40 60 30 180 $1,065 $840 $1,185 $3,760 $3,600 $10,450 Sq. ft. of floor space 400 300 300 800 1,000 2,800 Number of employees 40 25 30 200 150 445 Maint./Eng. hours 10 20 15 80 75 200