Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need help using the direct method for the remaining boxes. Problem 4B-6 Step-Down Method versus Direct Method; Predetermined Overhead Rates [LO4-10, LO4 The Sendai
I need help using the direct method for the remaining boxes.
Problem 4B-6 Step-Down Method versus Direct Method; Predetermined Overhead Rates [LO4-10, LO4 The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year Factory Administration Custodial Services Personnel Maintenance Machining-overhead Assembly-overhead Total cost $ 605, 530 160,344 54,799 99,237 891,776 480,814 $2,292,500 The company allocates service department costs to other departments in the order listed below Square Total Feet of Direct Number of Labor Space Labor- Machine- Employees Hours Occupied Hours Hours Department Factory Administration Custodial Services Personnel Maintenance Machining Assembly 25 14 18 53 72 108 290 14,500 10,300 8,300 14,000 11,100 44,400 15,600 100,000 75,000 132,000 186,000 150,000 25,000 187,000 31,000 318,700 149,500 319,000 217,000 Machining and Assembly are operating departments, the other departments are service departments. Factory Administration is allocated based on labor-hours; Custodial Services based on square feet occupied; Personnel based on number of employees, and Maintenance based on machine-hours Required: 1. Allocate service department costs to consuming departments by the step-down method. Then compute predetermined overhead rates in the operating departments using machine-hours as the allocation base in Machining and direct labor-hours as the allocation base in Assembly 2. Repeat (1) above, this time using the direct method. Again compute predetermined overhead rates in Machining and Assembly 3. Assume that the company doesn't bother with allocating service department costs but simply computes a single plantwide overhead rate that divides the total overhead costs (both service department and operating department costs) by the total direct labor-hours Compute the plantwide overhead rate 4. Suppose a job requires machine and labor time as followsStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started