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Department Overhead Budgets: Data: The Norther Plain Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: (Click the icon to view
Department Overhead Budgets:
Data:
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 i Data Table - Direct Manufacturing Number of Labor-Hours Employees 0 0 0 0 Number of Requisitions 0 0 0 40 Square Feet of Floor Space Occupied 0 5,000 12,000 5,000 7,000 22,000 29,000 Department Building and grounds Personnel General plant administration Cafeteria: operating loss Storeroom Machining Assembly 0 Indirect Manufacturing Labor-Hours 0 0 0 1,000 1,000 7,000 15,000 24,000 0 10 0 0 0 5,000 15,000 55 140 3,000 2,000 20,000 250 80,000 5,000 Total Basis used is number of employees 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: Building and grounds Personnel General plant administration Cafeteria Storeroom Total budgeted costs of operating departmentsStep by Step Solution
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