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:

	Machine- Hours		Direct Labor-Hours
Machining Department	270		34
Assembly Department	14		82
Total hours	284		116

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.

The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year: Factory Administration Custodial Services Personnel Maintenance Machining-overhead Assembly-overhead Total cost 350,700 122,425 56,830 116,045 1,210,800 1,074,200 $2,931, 000 The company allocates service department costs to other departments in the order listed below Square Total Feet of Direct Number of Labor- Space Labor- Machine- Employees Hours Occupied Hours Hours Department Factory Administration Custodial Services Personnel Maintenance Machining Assembly 26 13 19 52 80 120 310 7,600 9,300 8,800 17,600 7,000 46,900 12,100 40,000 70,000 45,000 150,000 120,000 20,000 231,000 60,000 233, 800 125,500 276,000 210,000 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 The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year: Factory Administration Custodial Services Personnel Maintenance Machining-overhead Assembly-overhead Total cost 350,700 122,425 56,830 116,045 1,210,800 1,074,200 $2,931, 000 The company allocates service department costs to other departments in the order listed below Square Total Feet of Direct Number of Labor- Space Labor- Machine- Employees Hours Occupied Hours Hours Department Factory Administration Custodial Services Personnel Maintenance Machining Assembly 26 13 19 52 80 120 310 7,600 9,300 8,800 17,600 7,000 46,900 12,100 40,000 70,000 45,000 150,000 120,000 20,000 231,000 60,000 233, 800 125,500 276,000 210,000 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