Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

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 270,000 68,760 28,840 45,200 376,300 175.900 $ 965,000 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 12 5,000 3,000 2,000 5,000 3,000 22,000 10,000 25 40 60 146 30,000 70,000 20,000 70,000 90,000 20,000 80,000 10,000 150,000 110,000 100,000 80,000 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 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 Direct Machine- Labor- Hours 25 75 Hours 190 10 200 Machining Department Assembly Department Total hours 100 Using the overhead rates computed in (1), (2), and (3) above, compute the amount of overhead cost that would be assigned to the job itf the overhead rates were developed using the step-down method, the direct method, and the plantwide method Required 1 Required 2 Required 3 Required 4 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. (Round your answer to 2 decimal places.) per 9,650.00DLH lantwide overhead rate

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing Principles And Techniques

Authors: Richard L. Ratliff, W. Wallace, Walter B. Mcfarland, J. Loeboecke

2nd Edition

0894133268, 978-0894133268

More Books

Students also viewed these Accounting questions

Question

Describe the team dynamics at Facebook.

Answered: 1 week ago