The Norther Plain Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: PE (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 in 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. Allocation Base Support Department Building and grounds Personnel General plant administration Cafeteria: operating loss Storeroom Support departments: Building and grounds $ 62,500 Personnel 300 14,240 General plant administration Cafeteria: Operating loss 1,295 6,465 $ 84,800 Storeroom Operating departments: Machining $ 36,000 45,000 81,000 Assembly $ 165,800 Total for support and operating departments Direct Manufacturing Labor-Hours Number of Employees Square Feet of Floor Space Occupied Manufacturing Labor-Hours Number of Requisitions 0 2,000 Department Building and grounds Personnel General plant administration Cafeteria: operating loss Storeroom Machining ooooo 16,000 1,000 4,000 2,000 2,000 5,000 9,400 4,000 12,000 42,000 185,000 Assembly 6,000 2,000 8,000 16,000 200 250,000 18,400 Total *Basis used is number of employees 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. 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. The Norther Plain Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: PE (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 in 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. Allocation Base Support Department Building and grounds Personnel General plant administration Cafeteria: operating loss Storeroom Support departments: Building and grounds $ 62,500 Personnel 300 14,240 General plant administration Cafeteria: Operating loss 1,295 6,465 $ 84,800 Storeroom Operating departments: Machining $ 36,000 45,000 81,000 Assembly $ 165,800 Total for support and operating departments Direct Manufacturing Labor-Hours Number of Employees Square Feet of Floor Space Occupied Manufacturing Labor-Hours Number of Requisitions 0 2,000 Department Building and grounds Personnel General plant administration Cafeteria: operating loss Storeroom Machining ooooo 16,000 1,000 4,000 2,000 2,000 5,000 9,400 4,000 12,000 42,000 185,000 Assembly 6,000 2,000 8,000 16,000 200 250,000 18,400 Total *Basis used is number of employees 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. 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