req 1, req2, req 3, req 4
Factory Administration Custodial Services Personnel Maintenance Machining-overhead Assembly-overhead Total cost $ 640,680 103,274 31,056 148,590 1,391,860 510,140 $2,825,600 oints eBook The company allocates service department costs to other departments in the order listed below. Print Square Total Feet of Direct Number of Labor Space Labor- Machine- Department Employees Hours Occupied Hours Hours Factory Administration Custodial Services Personnel Maintenance Machining Assembly eference 32 5, 700 13 9,700 3,600 14,600 8,100 52,900 14,100 13 52 60 90 65,000 50,000 49,000 200,000 195,000 20,000 224,000 40,000 260 337,200 101,500 273,000 240,000 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 follows Direct Machine-Labor- Hours Hours Machining Department Assembly Department Total hours 27 70 97 195 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 Factory Administration Custodial Services Personnel Maintenance Machining-overhead Assembly-overhead Total cost $ 640,680 103,274 31,056 148,590 1,391,860 510,140 $2,825,600 oints eBook The company allocates service department costs to other departments in the order listed below. Print Square Total Feet of Direct Number of Labor Space Labor- Machine- Department Employees Hours Occupied Hours Hours Factory Administration Custodial Services Personnel Maintenance Machining Assembly eference 32 5, 700 13 9,700 3,600 14,600 8,100 52,900 14,100 13 52 60 90 65,000 50,000 49,000 200,000 195,000 20,000 224,000 40,000 260 337,200 101,500 273,000 240,000 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 follows Direct Machine-Labor- Hours Hours Machining Department Assembly Department Total hours 27 70 97 195 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
