The Western Mountain Company has prepared department overhead budgets for budgeted volume levels before allocations as follows: Click the icon to view the department overhead budget) d locating 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 an departments Bases for location are to be selected from the following a ck the loon to view the data) B Read the requirements f the Requirement 1. Using the step down method woonte upport department costs Develop overhodes per direct manufacturing labor hour for machining and assembly o departments in the devenithis problem. Use the allocation base for each support department you think is moet propria Begin by s ing the location base for each support department Support Department Allocation Base Building and grounds Personnel Call operating Storm i Data Table x bpe 9,000 lining a Support departments: Building and grounds Personnel General plant administration Cafeteria: Operating loss Storeroom Operating departments: Machining Assembly 1,834 52,332 2,306 4,368 $ 69,840 31,000 45,000 Total for support and operating departments 76,000 145,840 $ -k Answer Print Done ment i Data Table art st apg to be Direct Manufacturing Labor-Hours Number of Employees Square Feet of Floor Space Occupied Indirect Manufacturing Labor-Hours Number of Requisitions meth proble Department Building and grounds Personnel General plant administration Cafeteria: operating loss for e 1,400 12,600 2,800 5,600 49,000 28,600 Storeroom 1,000 3,000 5,000 24,600 Machining Assembly 7,000 21,000 5,000 3,000 Total 28,000 280 100,000 33,600 8,000 "Basis used is number of employees Print Done the 0 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 25 Job 88 20 Job 89 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. Print Done