Department Overhead Budget:

Only requirement 2 needs an answer.

The Norther Plain 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 departmen Bases for allocation are to be selected from the following: (Click the icon to view the data.) i Data Table $ Support departments: Building and grounds Personnel General plant administration Cafeteria: Operating loss Storeroom Operating departments: Machining Assembly Total for support and operating departments 9,600 650 34,360 2,250 5,025 $ 51,885 $ 36,600 48,900 85,500 $ 137,385 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 Building and grounds Personnel General plant administration Cafeteria: operating loss Storeroom Allocation Base Square feet of floor space occupied Number of employees Manufacturing labor-hours Number of employees 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.) Operating Departments Support Departments General Cafeteria Bldg and Plant Operating Grounds Personnel Admin. Loss Storeroom Machining Assembly Costs incurred 9600 650 34360 2250 5025 36600 48900 Allocation of costs: $ (9,600) 600 1,440 600 840 2,640 3,480 $ (1,250) Building and grounds Personnel General plant administration 200 25 275 700 50 1,500 $(36,000) 1,500 10,500 22,500 Cafeteria $ (4,400) 110 1,210 3,080 3,000 $ Storeroom (7,500) 4,500 $ 55,725 $ Total budgeted costs of operating departments 81,660 Develop overhead rates per direct manufacturing labor-hour for machining and assembly using the step-down method. (Round the overhead rates to three decimal places.) Step-down method: Overhead rate per direct Total costs allocated to department Direct manufacturing labor-hours manufacturing labor-hour Machining $ 55,725 5,000 $ 11.145 Assembly $ 81,660 15,000 $ 5.444 Requirement 2. Using the direct method, rework requirement 1. Using the direct method, allocate support-department costs. (Round cost allocations to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs.) Operating Departments Support Departments General Cafeteria Bldg and Plant Operating Grounds Personnel Admin. Loss Storeroom Machining Assembly Costs incurred Allocation of costs: Building and grounds Personnel General plant administration Cafeteria LLLLLAE Storeroom Total budgeted costs of operating departments