"This is really an odd situation," said Jim Carter, general manager of Highland Publishing Company. "We get most of the jobs we bid on that require a lot of press time in the Printing Department, yet 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 rates 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 allocated based on square feet of space occupied and the Maintenance cost is allocated based on machine-hours. UTE Machine Direct Labor Hours Hours Department Personnel Custodial Services Maintenance Printing Binding Total Labor- Hours 16,400 8,800 14,200 38,300 102,000 171,700 Square Feet of Space Occupied 12,700 3,600 10,200 40,200 20,300 87,000 Number of Employees 29 50 69 103 308 559 166,000 48,000 214,000 20,600 73,000 93,000 Budgeted overhead costs in each department for the current year are shown below Personnel Custodial Services Maintenance Printing Binding Total budgeted cost $ 310,000 65,100 93,900 415,000 163,000 51,047,000 Because of its simplicity, the company has always used the direct method to allocate service department costs to the two operating departments Required: 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 departments. 3. Assume that during the current year the company bids on a job that requires machine and labor time as follows: Printing Department Binding Department Total hours Machine-Hours 2,800 500 3,300 Direct Labor-Hours 1,200 13,700 14,900 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 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. Reg1 Reg 2 Req3A 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 rero. Do not found intermediate calculations. Round "Predetermined overhead rate to 2 decimal places and rest of the answers to the nearest whole dollar amount.) Show less developed in (2) above. Complete this question by entering your answers in the tabs below. Reg 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 Personnel Custodial Services Maintenance Printing Binding Departmental costs before allocations $ 310,000 $ 65,100 $ 93,900 $ 415,000 $ 163,000 Allocations Personal costs Custodial services costs Maintenance costs Total cost after allocations 310,000 65,100 93.000 415,000 163,000 Predetermined overhead role Reg 2 > 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. Reg 1 Reg 2 Reg 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 Personnel Custodial Services Maintenance Printing Binding $ 65,100 $ 93,900 $ 415,000 $ 163,000 $ 310,000 Departmental costs before allocations Allocations: Personnel costs Custodial services costs Maintenance costs Total costs after allocations Predetermined overhead rate 310,000 65,100 93,900 415,000 163.000 ( Req1 RegSA > Printing Department Binding Department Total hours machine hours 2,800 500 3,300 Laur-hours 1,200 13,700 14,988 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 amouch 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. Reg 1 Reg 2 Reg 3A 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