The Tail Top Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: (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 Requirements 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. 3. 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. Direct Manufacturing Labor-Hours Machining Assembly Job 88 25 8 Job 89 6 18 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. - - Data table Data table Direct Manufacturing Labor-Hours Number of Employees Square Feet of Floor Space Occupied Indirect Manufacturing Labor-Hours Number of Requisitions Support departments: Building and grounds $ 4,000 0 0 0 0 0 Personnel 1,296 Department Building and grounds Personnel General plant administration 0 0 0 0 40,428 1,800 10,800 General plant administration Cafeteria: Operating loss 0 36 0 0 140 M Cafeteria: operating loss 0 9 3,600 2,000 0 11,188 $ Storeroom 57,052 Storeroom 0 9 4,500 2,000 0 Operating departments: Machining Machining 45 $ 7,000 21,000 18,000 11,300 6,000 27,800 7,000 3,000 31,000 47,000 81 Assembly Assembly 78,000 28,000 180 50,000 37,800 10,000 $ 135,052 Total Total for support and operating departments aBasis used is number of employees Print Done Print Done