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Can someone please help me understand this problem. Preferably in a Excel sheet so I can see where these numbers are coming from This is
Can someone please help me understand this problem. Preferably in a Excel sheet so I can see where these numbers are coming from
This is what I have so far..
The Heightened Hill Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: (Click the icon to view the department overhead budgets.) Management has decided that the most appropriate inventory costs are achieved by using individual department overhead rates. These rates are developed after support-department costs are allocated to operating departments. Bases for allocation are to be selected from the following: 6 (Click the icon to view the data.) Read the requirements. Requirement 1. Using the step-down method, allocate support-department costs. Develop overhead rates per direct manufacturing labor-hour for machining and assembly. Allocate the costs of the support departments in the order given in this problem. Use the allocation base for each support department you think is most appropriate. Begin by selecting the allocation base for each support department. Support Department Allocation Base Building and grounds Square feet of floor space occupied Personnel Number of employees General plant administration Manufacturing labor-hours Cafeteria: operating loss Number of employees Storeroom Number of requisitions Using the step-down method, allocate support-department costs. Allocate the costs of the support departments in the order given in this problem. (Round all indirect allocation rates to the nearest cent and all other computations to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs.) $ 27,000 2,100 28,000 Support departments: Building and grounds Personnel General plant administration Cafeteria: Operating loss Storeroom Operating departments: Machining Assembly 600 13,785 71,485 $ 36,000 50,000 86,000 $ 157,485 Total for support and operating departments Direct Manufacturing Number of Labor-Hours Employees 0 0 Indirect Manufacturing Labor-Hours 0 Number of Requisitions 0 0 0 0 0 0 40 Square Feet of Floor Space Occupied 0 5,000 16,000 6,000 2,500 38,500 82,000 0 Department Building and grounds Personnel General plant administration Cafeteria: operating loss Storeroom Machining Assembly 0 0 10 0 5 0 0 7,000 21,000 3,000 2,000 13,000 21,200 55 6,000 4,000 140 28,000 250 150,000 39,200 10,000 Total Basis used is number of employees Using the step-down method, allocate support-department costs. Allocate the costs of the support departments in the order given in this problem. (Round all indirect allocation rates to the nearest cent and all other computations to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs.) Support Departments Operating Departments General Cafeteria Bldg and Plant Operating Grounds Personnel Admin. Machining Assembly Costs incurred Allocation of costs: Loss Storeroom Building and grounds Personnel General plant administration Cafeteria Storeroom Total budgeted costs of operating departments 1. Using the step-down method, allocate support-department costs. Develop overhead rates per direct manufacturing labor-hour for machining and assembly. Allocate the costs of the support departments in the order given in this problem. Use the allocation base for each support department you think is most appropriate 2. Using the direct method, rework requirement 1. 3. Based on the following information about two jobs, determine the total overhead costs for each job by using rates developed in (a) requirement 1 and (b) requirement 2. Direct Manufacturing Labor-Hours Machining Assembly Job 88 19 1 Job 89 11 14 4. The company evaluates the performance of the operating department managers on the basis of how well they managed their total costs, including allocated costs. As the manager of the Machining Department, which allocation method would you prefer from the results obtained in requirements 1 and 2? Explain. 08 Operating Departments Storeroom Machining Assembly 13,785 36,000 50,000 69 Support Departments General Cafeteria Bldg and Plant Operating 70 Grounds Personnel Admin. Loss 71 Cost incurred 27,000 2,100 28,000 600 72 Allocation of Costs: 73 Building and grounds -27,000 900 2,880 1,080 74 Personel -3,000 480 120 75 General Plant administration -31,360 2,400 76 Cafeteria -4,200 77 Storeroom 450 60 6,930 660 10,400 14,760 1,680 16,960 1,600 The Heightened Hill Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: (Click the icon to view the department overhead budgets.) Management has decided that the most appropriate inventory costs are achieved by using individual department overhead rates. These rates are developed after support-department costs are allocated to operating departments. Bases for allocation are to be selected from the following: 6 (Click the icon to view the data.) Read the requirements. Requirement 1. Using the step-down method, allocate support-department costs. Develop overhead rates per direct manufacturing labor-hour for machining and assembly. Allocate the costs of the support departments in the order given in this problem. Use the allocation base for each support department you think is most appropriate. Begin by selecting the allocation base for each support department. Support Department Allocation Base Building and grounds Square feet of floor space occupied Personnel Number of employees General plant administration Manufacturing labor-hours Cafeteria: operating loss Number of employees Storeroom Number of requisitions Using the step-down method, allocate support-department costs. Allocate the costs of the support departments in the order given in this problem. (Round all indirect allocation rates to the nearest cent and all other computations to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs.) $ 27,000 2,100 28,000 Support departments: Building and grounds Personnel General plant administration Cafeteria: Operating loss Storeroom Operating departments: Machining Assembly 600 13,785 71,485 $ 36,000 50,000 86,000 $ 157,485 Total for support and operating departments Direct Manufacturing Number of Labor-Hours Employees 0 0 Indirect Manufacturing Labor-Hours 0 Number of Requisitions 0 0 0 0 0 0 40 Square Feet of Floor Space Occupied 0 5,000 16,000 6,000 2,500 38,500 82,000 0 Department Building and grounds Personnel General plant administration Cafeteria: operating loss Storeroom Machining Assembly 0 0 10 0 5 0 0 7,000 21,000 3,000 2,000 13,000 21,200 55 6,000 4,000 140 28,000 250 150,000 39,200 10,000 Total Basis used is number of employees Using the step-down method, allocate support-department costs. Allocate the costs of the support departments in the order given in this problem. (Round all indirect allocation rates to the nearest cent and all other computations to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs.) Support Departments Operating Departments General Cafeteria Bldg and Plant Operating Grounds Personnel Admin. Machining Assembly Costs incurred Allocation of costs: Loss Storeroom Building and grounds Personnel General plant administration Cafeteria Storeroom Total budgeted costs of operating departments 1. Using the step-down method, allocate support-department costs. Develop overhead rates per direct manufacturing labor-hour for machining and assembly. Allocate the costs of the support departments in the order given in this problem. Use the allocation base for each support department you think is most appropriate 2. Using the direct method, rework requirement 1. 3. Based on the following information about two jobs, determine the total overhead costs for each job by using rates developed in (a) requirement 1 and (b) requirement 2. Direct Manufacturing Labor-Hours Machining Assembly Job 88 19 1 Job 89 11 14 4. The company evaluates the performance of the operating department managers on the basis of how well they managed their total costs, including allocated costs. As the manager of the Machining Department, which allocation method would you prefer from the results obtained in requirements 1 and 2? Explain. 08 Operating Departments Storeroom Machining Assembly 13,785 36,000 50,000 69 Support Departments General Cafeteria Bldg and Plant Operating 70 Grounds Personnel Admin. Loss 71 Cost incurred 27,000 2,100 28,000 600 72 Allocation of Costs: 73 Building and grounds -27,000 900 2,880 1,080 74 Personel -3,000 480 120 75 General Plant administration -31,360 2,400 76 Cafeteria -4,200 77 Storeroom 450 60 6,930 660 10,400 14,760 1,680 16,960 1,600Step by Step Solution
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