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5 2 points 02:15:18 eBook The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year:
5 2 points 02:15:18 eBook The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year: Factory Administration Custodial Services Personnel Maintenance Machining-overhead Assembly-overhead Total cost $ 901,110 105,833 51,720 127,797 728,736 246,304 $2,161,500 The company allocates service department costs to other departments in the order listed below. Print References Department Factory Administration Custodial Services Personnel Maintenance Machining Assembly Total Square Feet of Direct Number of Labor- Space Labor Machine- Employees Hours Occupied Hours Hours 24 - 6,400 9 6,700 6,700 14 13,400 9,700 53 47,700 13,900 72 108 280 100,000 60,000 45,000 164,000 200,000 20,000 209,000 82,000 367,800 116,700 254,000 246,000 Machining and Assembly are operating departments; the other departments are service departments. Factory Administration is allocated based on labor-hours; Custodial Services based on square feet occupied; Personnel based on number of employees; and Maintenance based on machine-hours. Required: 1. Allocate service department costs to consuming departments by the step-down method. Then compute predetermined overhead rates in the operating departments using machine-hours as the allocation base in Machining and direct labor-hours as the allocation base in Assembly. 2. Repeat (1) above, this time using the direct method. Again compute predetermined overhead rates in Machining and Assembly. 3. Assume that the company doesn't bother with allocating service department costs but simply computes a single plantwide overhead rate that divides the total overhead costs (both service department and operating department costs) by the total direct labor-hours. Compute the plantwide overhead rate. 4. Suppose a job requires machine and labor time as follows: Machine- Hours Direct Labor- Hours Machining Department Assembly Department 240 29 16 74 Total hours 256 103 Using the overhead rates computed in (1), (2), and (3) above, compute the amount of overhead cost that would be assigned to the job if the overhead rates were developed using the step-down method, the direct method, and the plantwide method.
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