Please show all work.

Case 4B-7 Step-Down Method versus Direct Method ILO4-10, LO4-111 This is really an odd situation said Jim Carter, general manager of Highland Publishing Company. "We get most of the jobs we bid on that require a lot of press time in the Printing Department, yet profits on those jobs are never as high as they ought to be. On the other hand, we lose most of the jobs we bid on that require a lot of time in the Binding Department. would be inclined to think that the problem is with our overhead rates, but we're already computing separate overhead rates for each department. So what else could be wrong?" Highland Publishing Company is a large organization that offers a variety of printing and binding work. The Printing and Binding departments are supported by three service departments. The costs of these service departments are allocated to other departments in the order listed below (For each service department, use the allocation base that provides the best measure of service provided, as discussed in the chapter.) Square Feet Direct of Space Number of Machine Labor Total Department Labor Hours Occupied Employees Hours Hours 16,200 12,300 Personnel 25 Custodial Services 8,600 4,000 41 Maintenance 14,300 10,900 31,000 164,000 19,000 40,400 108 Printing 104,000 20,000 46,000 75,000 Binding 305 210,000 94,000 174.100 87,600 547 Budgeted overhead costs in each department for the current year are shown below: 330,000 Personnel 65,800 Custodial Services 93,000 Maintenance Printing 416,000 166,000 Binding Total budgeted cost $1,070,800