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any help is appreciated This is really an odd situation, said Jim Carter, general manager of Highland Publishing Company. We get most of the jobs

any help is appreciated
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"This is really an odd situation," said Jim Carter, general manager of Highland Publishing Company. "We get most of the jobs we bid on that require a lot of press time in the Printing Department, yet profits on those jobs are never as high as they ought to be. On the other hand, we lose most of the jobs we bid on that require a lot of time in the Binding Department. I would be inclined to think that the problem is with our overhead rates, but we're already computing separate overhead rates for each department. So what else could be wrong?" Highland Publishing Company is a large organization that offers a variety of printing and binding work. The Printing and Binding departments are supported by three service departments. The costs of these service departments are allocated to other departments in the order listed below. The Personnel cost is allocated based on number of employees. The Custodial Services cost is allocated based on square feet of space occupied and the Maintenance cost is allocated based on machine-hours. Total Labor- Square Feet of Number of Machine- Direct Labor- Department Hours Space Occupied Employees Hours Hours Personnel 16,900 12,100 24 Custodial Services 8,000 3,200 45 Maintenance 14,500 10,800 64 Printing 30, 200 40,200 101 169,000 15,000 Binding 104,000 20,000 49,000 71,000 173,600 86,300 86,000 306 540 218,000 Budgeted overhead costs in each department for the current year are shown below: Personnel Custodial Services Maintenance Printing Binding Total budgeted cost $ 310,000 65,000 93,400 419.000 167,000 $1,054,400 Because of its simplicity, the company has always used the direct method to allocate service department costs to the two operating departments Required: 1. Using the step-down method, allocate the service department costs to the consuming departments. Then compute predetermined overhead rates in the two operating departments. Use machine-hours as the allocation base in the Printing Department and direct labor-hours as the allocation base in the Binding Department 2. Repeat (1) above, this time using the direct method. Again compute predetermined overhead rates in the Printing and Binding departments 3. Assume that during the current year the company bids on a job that requires machine and labor time as follows: Direct Machine-Yours Labor-Houro Printing Department 2,200 1,200 Binding Department 13,300 Total hours 2,900 14,500 700 a. Determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in (1) above. Then determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in (2) above. Reg 1 Reg 2 Reg Using the step-down method, allocate the service department costs to the consuming departments. Then compute predetermined overhead rates in the two operating departments. Use machine-hours as the allocation base in the Printing Department and direct labor- hours as the allocation base in the Binding Department. (Please enter allocations from a department as negative and allocations to a Show more Personnel Custodial Maintenance Services Printing Binding Departmental costs before allocations $ 310,000 $ 65,000 $ 93.400 $ 419,000 $167.000 Allocations: Personnel costs (310,000) Custodial services costs Maintenance costs Total costs after allocations 65,000 93.400 419,000 167,000 Predotormined overhead rate 0 Reg 1 Reg 2 Req 3A Repeat requirement 1 above, this time using the direct method. Again compute predetermined overhead rates in the Printing and Binding departments. (Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations. Round "Predetermined overhead rate" to 2 decimal places and rest of the answers to the nearest whole dollar amount.) Show less Personnel Custodial Maintenance Printing Binding Services Departmental costs before allocations $ 310,000 $ 65,000 $ 93,400 $ 419,000 $ 167,000 Allocations: Personnel costs (310,000) Custodial services costs Maintenance costs Total costs after allocations 0 65,000 93,400 419,000 167,000 Predetermined overhead rate Req 1 Reg 2 Req 3A Determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in requirement 1 above. Then determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in requirement 2. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Show less Total Overhead Cost Step-down method Direct method

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