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 $ 985,325 142,911 61,544 65,540 919,272 867,258 $3,041,850 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 26 14,500 11 8,600 17 17,600 4,800 56 52,600 19,400 96 120,000 75,000 40,000 161,250 144 160,000 25,000 232,000 53,750 350 358,300 147,300 272,000 215,000 Department Factory Administration Custodial Services Personnel Maintenance Machining Assembly 8,100 111 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: Machining Department Assembly Department Total hours Machine- Hours 285 10 295 Direct Labor- Hours 30 84 114 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 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. (Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations. Round "Predetermined overhead rates" to 2 decimal places and other final answers to the nearest whole dollar amount.) Show less Maintenance Machining Assembly Factory Custodial Administration Services Personnel $ 985,325 $ 142,911 $ 61,544 S 65,540 Departmental costs before allocation Allocations: Factory administration Custodial services Personnel Maintenance $ 985,325 $ 142,911 $ 61,544 $ 65,540 S 0 $ 0 Total costs after allocation Predetermined overhead rate Required 1 Required 2 >
