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 doesnt 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 follows:

The Sendai Co., Ltd ., of Japan has budgeted costs in its various departments as follows for the coming year: Factory Administration Custodial Services 994,245 202,335 28,650 122,120 921,900 277,525 $2,546,775 Personnel Maintenance Machining-overhead Assembly-overhead Total cost The company allocates service department costs to other departments in the order listed below. Square Direct Labor Machine- Total Feet of Space Hours Occupied Hours 10,800 7,200 3,300 19,800 80,000 100,000 Number of Labor- Department Factory Administration Custodial Services Employees Hours 22 15 7,000 15,000 47,900 Personnel 12 Maintenance 51 Machining Assembly 30 56,000 183,750 61,250 120 240,000 40,000 216,000 389,900 181,100 272,000 245,000 250 Direct Machine Labor- Hours Hours Machining Department Assembly Department 26 270 11 77 281 103 Total hours Required 1 Required 2 Required 3 Required 4 Allocate service department costs to consuming departments by the step-down method. Then compute predetermined overhe departments using machine-hours as the allocation base in Machining and direct labor-hours as the allocation base in Assemb allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do calculations. Round "Predetermined overhead rates" to 2 decimal places and other final answers to the nearest whole dollar an Factory Administration Custodial Services Personnel Maintenance Machining Assembly $ 994,245 202,335 28,650 Departmental costs before allocation 122,120 Allocations: Factory administration Custodial services Personnel Maintenance Total costs after allocation Predetermined overhead rate Required 1 Required 2 Required 3 Required 4 Repeat requirement 1 above, this time using the direct method. Again compute predetermined overhead rates in Machining a allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do calculations. Round "Predetermined overhead rates" to 2 decimal places and other final answers to the nearest whole dollar a Factory Administration Custodial Services Personnel Maintenance Machining Assembly 994,245S 122,120 Departmental costs before allocation 202,335 28,650 Allocations: Factory administration Custodial services Personnel Maintenance Total costs after allocation Predetermined overhead rate Required 1 Required 2 Required 3 Required 4 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. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Plantwide overhead per DLH rate Required 2 Required 1 Required 3 Required 4 Using the overhead rates computed in (1), (2), and (3) above, Compute the amount of overhead cost that would be assigned to the job if the overhead rates were developed using the step-down method, the direct method, and the plantwide method. (Do not round intermediate calculations. Round "Predetermined overhead rates" to 2 decimal places and other final answers to the nearest whole dollar amount.) Show less Overhead Cost Step-down method Direct method Plantwide method The Sendai Co., Ltd ., of Japan has budgeted costs in its various departments as follows for the coming year: Factory Administration Custodial Services 994,245 202,335 28,650 122,120 921,900 277,525 $2,546,775 Personnel Maintenance Machining-overhead Assembly-overhead Total cost The company allocates service department costs to other departments in the order listed below. Square Direct Labor Machine- Total Feet of Space Hours Occupied Hours 10,800 7,200 3,300 19,800 80,000 100,000 Number of Labor- Department Factory Administration Custodial Services Employees Hours 22 15 7,000 15,000 47,900 Personnel 12 Maintenance 51 Machining Assembly 30 56,000 183,750 61,250 120 240,000 40,000 216,000 389,900 181,100 272,000 245,000 250 Direct Machine Labor- Hours Hours Machining Department Assembly Department 26 270 11 77 281 103 Total hours Required 1 Required 2 Required 3 Required 4 Allocate service department costs to consuming departments by the step-down method. Then compute predetermined overhe departments using machine-hours as the allocation base in Machining and direct labor-hours as the allocation base in Assemb allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do calculations. Round "Predetermined overhead rates" to 2 decimal places and other final answers to the nearest whole dollar an Factory Administration Custodial Services Personnel Maintenance Machining Assembly $ 994,245 202,335 28,650 Departmental costs before allocation 122,120 Allocations: Factory administration Custodial services Personnel Maintenance Total costs after allocation Predetermined overhead rate Required 1 Required 2 Required 3 Required 4 Repeat requirement 1 above, this time using the direct method. Again compute predetermined overhead rates in Machining a allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do calculations. Round "Predetermined overhead rates" to 2 decimal places and other final answers to the nearest whole dollar a Factory Administration Custodial Services Personnel Maintenance Machining Assembly 994,245S 122,120 Departmental costs before allocation 202,335 28,650 Allocations: Factory administration Custodial services Personnel Maintenance Total costs after allocation Predetermined overhead rate Required 1 Required 2 Required 3 Required 4 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. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Plantwide overhead per DLH rate Required 2 Required 1 Required 3 Required 4 Using the overhead rates computed in (1), (2), and (3) above, Compute the amount of overhead cost that would be assigned to the job if the overhead rates were developed using the step-down method, the direct method, and the plantwide method. (Do not round intermediate calculations. Round "Predetermined overhead rates" to 2 decimal places and other final answers to the nearest whole dollar amount.) Show less Overhead Cost Step-down method Direct method Plantwide method