Check my work 1 "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. ook rint "ences Machine- Hours Direct Labor- Hours Department Personnel Custodial Services Maintenance Printing Binding Total Labor- Hours 16,000 8,000 14,900 30,800 101,000 170,700 Square Feet of Space Occupied 12,900 3,400 10,100 40,200 20,900 87,500 Number of Employees 22 47 63 107 301 540 160,000 46,000 206,000 11,000 71,000 82,000 Budgeted overhead costs in each department for the current year are shown below: Personnel Custodial Services Maintenance Printing Binding $ 350,000 65,800 93,300 412,000 161,000 Prev 1 of 2 Next > OCT - D Check my work Personnel Custodial Services Maintenance Printing Binding Total budgeted cost $ 350,000 65,800 93,300 412,800 161,000 $1,082, 100 OK ces 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: Printing Department Binding Department Total hours Machine-Hours 2,000 600 2,600 Direct Labor-Hours 1,100 13,300 14,400 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. Prev 1 of 2 Next > OCT @ X O 07 W Check my work 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. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Using the step-down method, allocate the service department costs to the consuming departments. Then compute predeti overhead rates in the two operating departments. Use machine-hours as the allocation base in the Printing Department an hours as the allocation base in the Binding Department. (Please enter allocations from a department as negative and alloc department as positive. The lineshould add across to zero. Do not round intermediate calculations. Round "Predetermined rate" to 2 decimal places and rest of the answers to the nearest whole dollar amount.) Custodial Personnel Services Maintenance Printing Binding $ 350,000 $ 65,800 $ 93,300 $ 412,000 $ 161,000 Departmental costs before allocations Allocations: Personnel costs Custodial services costs Maintenance costs Total costs after allocations Predetermined overhead rate 350,000 65,800 93,300 412,000 161,000 lega Reg 2 > Prev 1 of 2 Next > BBS DVD 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. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A as Repeat requirement 1 above, this time using the direct method. Again comput predetermined overhead rates in the Print Binding departments. (Please enter allocations from a department as negative and allocations to a department as positive should add across to zero. Do not round intermediate calculations. Round "Predetermined overhead rate" to 2 decimal plat the answers to the nearest whole dollar amount.) Maintenance Personnel Custodial Services $ 350,000 $ 65,800 Printing Binding $ 412,000 $ 161,000 $ 93,300 Departmental costs before allocations Allocations: Personnel costs Custodial services costs Maintenance costs Total costs after allocations Predetermined overhead rate 350,000 65,800 93,300 412,000 161,000 ( Req1 Req3A > Prev 1 of 2 Next > OCT 5 O w Check my work 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. Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Req Determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates develop in requirement 1 above. Then determine the amount of overhead cost that would be assigned to the job if the company us the overhead rates developed in requirement 2. (Round your intermediate calculations to 2 decimal places and final answe to the nearest whole dollar amount.) Show less Total Overhead Cost Step-down method Direct method Reg 2 HA Prev 1 of 2 Next >