"This is really an odd situation." said Jim Carter, general manager of Highland Publishing Company. We get most of the jobs we bidon that require a lot of press time in the Printing Department, yot profits on those jobs are never as high as they ought to be on the other hand, we lose most of the jobs we bid on that require a lot of time in the Binding Department I would be inclined to think that the problem is with our overhead rates, but we're already computing separate overhead res for each department. So what else could be wrong? Highland Publishing Company is a large organization that offers a variety of printing and binding work. The Printing and Binding departments are supported by three service departments. The costs of these service departments are allocated to other departments in the order listed below. The Personnel cost is allocated based on number of employees. The custodial Services cost is located based on square feet of space occupied and the Maintenance cost is allocated based on machine hours Square Feet Total Labor- of Space Number of Machine - Direct Labor Department Hours Occupied Employees Hours Hours Personnel 16,200 12,600 20 Custodial Services 48 Maintenance 14,800 10,600 63 30,100 102 40,200 Printing 168,000 16,000 103.000 Binding 20.100 305 71.000 41.000 B6, BD 542 8.600 3.300 Budgeted overhead costs in each department for the current year are shown below Personnel Custodial Services Maintenance Printing Binding Total budgeted cost $ 350,00 65,900 94,000 414.000 163,00 31.086 900 Prev 1 of 2 Next > Check my work 1 nts 02 00:38 Because of its simplicity, the company has always used the direct method to allocate service department costs to the two operating departments Required: 1. Using the step-down method, allocate the service department costs to the consuming departments. Then compute predetermined overhead rates in the two operating departments. Use machine-hours as the allocation base in the Printing Department and direct labor-hours as the allocation base in the Binding Department. 2. Repeat (1) above, this time using the direct method. Again compute predetermined overhead rates in the Printing and Binding 3. Assume that during the current year the company bids on a job that requires machine and labor time as follows Direct Machine-Hours Labor-Hours Printing Department 2,100 1,100 Binding Department 800 13,200 Total hours 2,900 14,300 Book Print ferences a. Determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in (1) above. Then determine the amount of overtlead cost that would be assigned to the job if the company used the overhead rates developed in (2) above, Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Repeat requirement 1 above, this time using the direct method. Again compute predetermined overhead rates in the Printing and Binding departments. (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 rate to 2 decimal places and rest of the answers to the nearest whole dollar amount.) Prev 1 of 2 Next > w A a 5 MacBook Pro Che Req 1 Reg 2 Reg 3A Using the step-down method, allocate the service department costs to the consuming departments. Then compute predetermined overhead rates in the two operating departments. Use machine-hours as the allocation base in the Printing Department and direct labor- hours as the allocation base in the Binding Department. (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 rate" to 2 decimal places and rest of the answers to the nearest whole dollar amount.) Show less Custodial Personnel Services Maintenance Printing Binding $ 350,000 $ 65,900 $ 94,000 $ 414,000 $ 163,000 (42,568) (68,919) (206,081) Departmental costs before allocations Allocations: Personnel costs Custodial services costs Maintenance costs Total costs after allocations Predetermined overhead rate (350,000) 0 (32,432) (65.900) 0 (32,432) 51,432 345,081 (43,081) Reg 2 > BRE Prev 1 of 2 Next > Check my work Reg 1 Reg 2 Reg 3A Repeat requirement 1 above, this time using the direct method. Again compute predetermined overhead rates in the Printing and Binding departments. (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 rate" to 2 decimal places and rest of the answers to the nearest whole dollar amount.) Show less -19 Custodial Personnel Maintenance Services Printing Binding $ 350,000 $ 85,900 $ 94,000 $ 414.000 $ 163,000 87,715 262285 os (350,000) (65.900) Departmental costs before allocations Allocations Personnel costs Custodial services costs Maintenance costs Total costs after allocations Predetermined overhead rate (94.000) 0 501,715 425,285 D Reg1 Red 3A > 10 points a. Determine the amount of overhead cost that would be assigned to the job if the company used the overhead tates developed in (1) above. Then determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in (2) above, Complete this question by entering your answers in the tabs below. 02:00 03 Reg: Rea 2 Reg 3 Book Print Rutorences Determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed In requirement 1 above. Then determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in requirement 2. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount) Show less Total Overhead Cost Step-down method Direct method Reg2