Problem 3 (5 marks) The Central Valley Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: Support departments: Building and grounds $45,000 Personnel $300 General plant administration $37,320 Cafeteria operating loss $970 Storeroom $9,990 Total for support departments $93,580 Operating departments: Machining $36,000 Assembly $46,000 Total for operating departments $82,600 Total for support and operating departments $176,180 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: Department Direct Manufacturing Labor-Hours Number of Employees Square Feet of Floor Space Occupied Indirect Manufacturing Labor-Hours Number of Requisitions 0 0 0 0 0 Building and grounds Personnel (Basis used is number of employees) 0 0 2,500 0 0 Problem 3 (5 marks) The Central Valley Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: Support departments: Building and grounds $45,000 Personnel $300 General plant administration $37,320 Cafeteria operating loss $970 Storeroom $9,990 Total for support departments $93,580 Operating departments: Machining $36,000 Assembly $46,000 Total for operating departments $82,600 Total for support and operating departments $176,180 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: Department Direct Manufacturing Labor-Hours Number of Employees Square Feet of Floor Space Occupied Indirect Manufacturing Labor-Hours Number of Requisitions 0 0 0 0 0 Building and grounds Personnel (Basis used is number of employees) 0 0 2,500 0 0