Assume a firm uses job costing. Which of the following is NOT a good reason to use departmental overhead rates rather than a single plantwide rate?

Select one:

a. The various products made by the firm follow different sequences of manufacturing activities.

b. Total overhead costs amount to about 5 per cent of total prime costs.

c. Overhead costs in some departments are a very large proportion of total department cost, but are a very small proportion in other departments.

d. The firm makes multiple products using common equipment and employees.

The Singleton Boot Company has four departments in its factory with two service departments, S1 and S2, and two production departments Assembly and Finishing. The current costs of each department are: Service Departments Production Departments S1 $308 000 Assembly $505 000 S2 $256 000 Finishing $495 000 The distribution and consumption of services is given in the following table: Services provided to: S1 S2 Assembly Finishing Services provided by: S1 35% 45% 20% S2 15% 60% 25% Using the step-down method how much overhead costs will be allocated from S2 to Finishing: Select one: a. $64,000 b. $75,294 c. $107,000 d. $90,950