8)Sendai Company has budgeted costs in its various departments as follows for the coming year:

Factory Administration	$ 270,000
Custodial Services	68,760
Personnel	28,840
Maintenance	45,200
Machiningoverhead	376,300
Assemblyoverhead	175,900
Total cost	$ 965,000

The company allocates service department costs to other departments in the order listed below.

Department	Number of Employees	Total Labor-Hours	Square Feet of Space Occupied	Direct Labor-Hours	Machine-Hours
Factory Administration	12	-	5,000	-	-
Custodial Services	4	3,000	2,000	-	-
Personnel	5	5,000	3,000	-	-
Maintenance	25	22,000	10,000	-	-
Machining	40	30,000	70,000	20,000	70,000
Assembly	60	90,000	20,000	80,000	10,000
	146	150,000	110,000	100,000	80,000

Machining and Assembly are operating departments; the other departments are service departments. Factory Administration is allocated based on total 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. Allocate service department costs to consuming departments by direct method. Again compute predetermined overhead rates in Machining and Assembly.

3. Assume that the company doesnt bother with allocating service department costs but simply computes a 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-hours and labor-hours as follows:

	Machine-Hours	Direct Labor-Hours
Machining Department	190	25
Assembly Department	10	75
Total hours	200	100

Using the overhead rates from requirements (1), (2), and (3), compute the amount of overhead cost that would be assigned to the job.