Beow is my question. I asked the same exact question last night but I got the response to something else instead.

I need help with part 2 which is the Direct Method. I need to know where to get the ratios to be able to get the numbers for Maching and Asembly. I hope someone can help me understand this material. Thank you for your help!

Problem 4B-6 Step-Down Method versus Direct Method; Predetermined Overhead Rates [LO4-10, LO4-11]

The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year:

Factory Administration	$	480,760
Custodial Services		116,260
Personnel		45,602
Maintenance		141,258
Machiningoverhead		874,528
Assemblyoverhead		1,181,192
Total cost	$	2,839,600

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	27		8,600
Custodial Services	11	11,600	3,600
Personnel	18	16,700	8,600
Maintenance	54	44,500	16,000
Machining	64	60,000	60,000	112,000	180,000
Assembly	96	150,000	20,000	227,000	36,000
	270	282,800	116,800	339,000	216,000

Machining and Assembly are operating departments; the other departments are service departments. Factory Administration is allocated on the basis of labor-hours; Custodial Services on the basis of square feet occupied; Personnel on the basis of number of employees; and Maintenance on the basis of 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 a machine-hours basis in Machining and a direct labor-hours basis in Assembly. (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 rates" to 2 decimal places and other answers to the nearest whole dollar amount.)

2.

Allocate service department costs to consuming departments by the direct method. Again, compute predetermined overhead rates in Machining and Assembly. (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 rates" to 2 decimal places and other answers to the nearest whole dollar amount.)

3.	Assume that the company doesnt bother with allocating service department costs but simply computes a single plantwide overhead rate based on total overhead costs (both service department and operating department costs) divided by total direct labor-hours. Compute the plantwide overhead rate. (Round your answer to 2 decimal places.)

4.	Suppose a job requires machine and labor time as follows:

	Machine-Hours	Direct Labor-Hours
Machining Department	290	28
Assembly Department	15	84
Total hours	305	112

Compute the amount of overhead cost that would be assigned to the job if the overhead rates were developed using the stepdown method, the direct method, and the plantwide method. (Round intermediate calculations to 2 decimal places and final calculations to the nearest whole dollar.)