he Heightened HillHeightenedHill Company has prepared department overhead budgets for budgeted volume levels before allocations as follows LOADING (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 LOADING (Click the icon to view the data ) Read the requirements LOADING Question content area bottom Part 1 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 Part 2 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 Loss Storeroom Machining Assembly Costs incurred $56,000 $2,060 $22,785 $225 $3,720 $33,000 $52,400 Allocation of costs Building and grounds $(56,000) 140 1,470 700 840 4,900 47,950 Personnel $(2,200) 385 110 55 550 1,100 General plant administration $(24,640) 1,600 800 8,000 14,240 Cafeteria $(2,635) 85 850 1,700 Storeroom $(5,500) 2,750 2,750 Total budgeted costs of operating departments $50,050 $120,140 Part 3 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 Assembly

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he Heightened HillHeightenedHill Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: LOADING... (Click the icon to view the department overhead

Heightened HillHeightenedHill

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:

(Click

the icon to view the data.)

Read the

requirements

Question content area bottom

Part 1

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

Part 2

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.	Loss	Storeroom	Machining	Assembly
Costs incurred	$56,000	$2,060	$22,785	$225	$3,720	$33,000	$52,400
Allocation of costs:
	Building and grounds	$(56,000)	140	1,470	700	840	4,900	47,950
	Personnel		$(2,200)	385	110	55	550	1,100
	General plant administration			$(24,640)	1,600	800	8,000	14,240
	Cafeteria				$(2,635)	85	850	1,700
	Storeroom					$(5,500)	2,750	2,750
Total budgeted costs of operating departments				$50,050	$120,140

Part 3

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			=
Assembly			=