The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year: Factory Administration $ 533,800 Custodial Services 102,568 Personnel 68,774 Maintenance 151,718 Machiningoverhead 1,851,536 Assemblyoverhead 761,704 Total cost $ 3,470,100 The company allocates service department costs to other departments in the order listed below. Department Number of Employees Total Labor- Hours Square Feet of Space Occupied Direct Labor- Hours Machine- Hours Factory Administration 25 6,500 Custodial Services 17 9,400 2,000 Personnel 21 12,300 5,600 Maintenance 57 45,200 11,100 Machining 96 50,000 75,000 130,000 240,000 Assembly 144 150,000 25,000 169,000 30,000 360 266,900 125,200 299,000 270,000 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 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 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 280 33 Assembly Department 14 76 Total hours 294 109

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.