Hours 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. Total Labor Square Feet of Number of Department Direct Labor Space Occupied Employees Machine Hours Hours Personnel 16,900 12,200 24 Custodial Services 8,200 3,400 Maintenance 14,200 11,000 Printing 30,300 40,300 164,000 14,000 102,000 20.800 Binding 43,000 71,000 171,600 87,200 547 207.000 85,000 48 62 108 305 Budgeted overhead costs in each department for the current year are shown below. Personnel Custodial Services Maintenance Printing Binding Total budgeted cost 350,000 65,200 93,106 412,000 169.000 1,059,300 Recause of its simplicity, the company has always used the direct method to allocate service department costs to the two operating 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 2,500 500 3,000 Direct Labor Hours 1,200 13.900 15,100 a. Determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in / 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. Hours 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. Total Labor Square Feet of Number of Department Direct Labor Space Occupied Employees Machine Hours Hours Personnel 16,900 12,200 24 Custodial Services 8,200 3,400 Maintenance 14,200 11,000 Printing 30,300 40,300 164,000 14,000 102,000 20.800 Binding 43,000 71,000 171,600 87,200 547 207.000 85,000 48 62 108 305 Budgeted overhead costs in each department for the current year are shown below. Personnel Custodial Services Maintenance Printing Binding Total budgeted cost 350,000 65,200 93,106 412,000 169.000 1,059,300 Recause of its simplicity, the company has always used the direct method to allocate service department costs to the two operating 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 2,500 500 3,000 Direct Labor Hours 1,200 13.900 15,100 a. Determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in / 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
