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 $ 533,800 102,568 68,774 151,718 1,851,536 761,704 $3,470, 100 The company allocates service department costs to other departments in the order listed below. Department Factory Administration Custodial Services Personnel Maintenance Machining Assembly Square Total Teet of Direct Number of Labor Space Labor- Machine Employees Hours Occupied Hours Hours - 6,500 9.400 2.000 21 12,300 5,600 57 45.200 11.100 50,000 75,000 130,000 240,000 150,000 25,000 169,000 30,000 360 266,900 125,200 209,000 270,000 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 occupled: 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 Prey 1 of 3 Next > Behining 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: Machine- Hours Direct Labor- Hours 280 33 Machining Department Assembly Department Total hours 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 Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 Required 4 Prey 1 of 3 Next >
