"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 occupled and the Maintenance cost is allocated based on machine-hours. Total Labor- Square Feet of Number of Machine Direct Labor- Department Hours Space Occupied Employees Hours Personnel 16,400 12,900 22 Custodial Services 8,900 3,500 Maintenance 14,100 10,100 Printing 30,800 40,900 100 160,000 15,000 Binding 103.000 20.800 79,000 173,200 200,000 94,000 Hours 41 61 48,000 305 529 88, 200 Budgeted overhead costs in each department for the current year are shown below: Personnel Custodial Services Maintenance Printing Binding Total budgeted cont $ 330,000 65,200 93,700 412,000 168,000 01.06.200 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 2.300 1,500 Binding Department 600 13,200 Total hours 2.900 141200 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 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 Maintenance Services $ 330,000 $ 65,200 $ 93,700 Printing Binding $ 412,000 $ 168,000 Departmental costs before allocations Allocations: Personnel costs Custodial services couts Maintenance costs Total costs after allocations Predetermined overhead rato Req2 > Reg 1 Recta Req 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 Maintenance Printing Binding Services $ 330,000 $ 65,200 $ 93,700 $ 412,000 $ 168,000 Departmental costs before allocations Allocations: Personnel costs Custodial services costs Maintenance costs Total costs after allocations Predetermined overhead rate ve Complete this question by entering your answers in the tabs below. Req1 Reg 2 Req 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