%P15-30 (similar to) Question Help The Southern Wind 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 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 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 Square feet of floor space occupied Building and grounds Number of employees Personnel Manufacturing labor-hours General plant administration Number of employees Cafeteria: operating loss Number of requisitions Storeroom 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 Allocation of costs: Building and grounds Personnel General plant administration Cafeteria Storeroom Total budgeted costs of operating departments Enter any number in the edit fields and then click Check Answer Support departments: Building and grounds 10,500 Personnel 1,700 General plant administration 26,600 Cafeteria: Operating loss 450 5,225 44,475 Storeroom Operating departments: Machining 36,000 48,000 84,000 Assembly $128,475 Total for support and operating departments Direct Square Feet of Manufacturing Number of Floor Space Manufacturing Number of Department Labor-Hours Employees Occupied Labor-Hours Requisitions Building and grounds 0 0 0 Personnel* 0 2,000 0 General plant administration 40 4,000 0 Cafeteria: operating loss 0 5 2,500 2,000 Storeroom 0 5 4,000 2,000 Machining 4,000 60 24,000 5,000 3,000 12,000 90 33,500 9,400 2,000 Assembly 16,000 200 70,000 18,400 5,000 Total Basis used is number of employees LO 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 2. Using the direct method, rework requirement 1 3. Based on the following information about two jobs, determine the total overhead costs for each job by using rates developed in (a) requirement 1 and (b) requirement 2 4. The company evaluates the performance of the operating department managers on the basis of how well they managed their total costs, including allocated costs. As the manager of the Machining Department, which allocation method would you prefer from the results obtained in requirements 1 and 2? Explain %P15-30 (similar to) Question Help The Southern Wind 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 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 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 Square feet of floor space occupied Building and grounds Number of employees Personnel Manufacturing labor-hours General plant administration Number of employees Cafeteria: operating loss Number of requisitions Storeroom 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 Allocation of costs: Building and grounds Personnel General plant administration Cafeteria Storeroom Total budgeted costs of operating departments Enter any number in the edit fields and then click Check Answer Support departments: Building and grounds 10,500 Personnel 1,700 General plant administration 26,600 Cafeteria: Operating loss 450 5,225 44,475 Storeroom Operating departments: Machining 36,000 48,000 84,000 Assembly $128,475 Total for support and operating departments Direct Square Feet of Manufacturing Number of Floor Space Manufacturing Number of Department Labor-Hours Employees Occupied Labor-Hours Requisitions Building and grounds 0 0 0 Personnel* 0 2,000 0 General plant administration 40 4,000 0 Cafeteria: operating loss 0 5 2,500 2,000 Storeroom 0 5 4,000 2,000 Machining 4,000 60 24,000 5,000 3,000 12,000 90 33,500 9,400 2,000 Assembly 16,000 200 70,000 18,400 5,000 Total Basis used is number of employees LO 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 2. Using the direct method, rework requirement 1 3. Based on the following information about two jobs, determine the total overhead costs for each job by using rates developed in (a) requirement 1 and (b) requirement 2 4. The company evaluates the performance of the operating department managers on the basis of how well they managed their total costs, including allocated costs. As the manager of the Machining Department, which allocation method would you prefer from the results obtained in requirements 1 and 2? Explain