Total Labor- Square Feet of Department Hours Space Occupied Number of Employees Machine- Hours Direct Labor-...

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Total Labor- Square Feet of Department Hours Space Occupied Number of Employees Machine- Hours Direct Labor- Hours Personnel 16,000 12,400 22 Custodial Services 8,200 3,100 49 Maintenance 14,300 10,500 69 Printing 30,600 40,400 105 161,000 16,000 Binding 108,000 20,900 300 49,000 76,000 177,100 87,300 545 210,000 92,000 Budgeted overhead costs in each department for the current year are shown below: Personnel Custodial Services Maintenance Printing $ 300,000 66,000 93,400 414,000 170,000 Binding Total budgeted cost $ 1,043,400 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: Direct Labor- Printing Department Binding Department Total hours Machine-Hours 2,400 500 2,900 Hours 1,400 13,200 14,600 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. Req 1 Req 2 Req 3A Total Labor- Square Feet of Department Hours Space Occupied Number of Employees Machine- Hours Direct Labor- Hours Personnel 16,000 12,400 22 Custodial Services 8,200 3,100 49 Maintenance 14,300 10,500 69 Printing 30,600 40,400 105 161,000 16,000 Binding 108,000 20,900 300 49,000 76,000 177,100 87,300 545 210,000 92,000 Budgeted overhead costs in each department for the current year are shown below: Personnel Custodial Services Maintenance Printing $ 300,000 66,000 93,400 414,000 170,000 Binding Total budgeted cost $ 1,043,400 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: Direct Labor- Printing Department Binding Department Total hours Machine-Hours 2,400 500 2,900 Hours 1,400 13,200 14,600 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. Req 1 Req 2 Req 3A

Answer rating: 100% (QA)

Step 1 Allocating Service Department Costs StepDown Method We will allocate the costs of the service departments Custodial Services and Maintenance to ... View the full answer