Montclair, Inc., has three support departments: Cafeteria, Janitorial, and Administration. It also has two line departments: Machining and Assembly. The following data pertain to operations for the most recent year.

Required:
a. Allocate the costs traced to the support activities (departments) to the line activities (departments), using the direct method.
b. Allocate the costs traced to the support activities (departments) to the line activities (departments), using the step-down method. Rank support departments by size to determine the order of allocation.
c. Continue with your answer to part (b) above. Suppose the Machining Department expects to incur 10,000 machine hours for the month and the Assembly Department expects to incur 25,000 labor hours. Determine the overhead rate per machine hour in the Machining Department and per labor hour in the AssemblyDepartment.

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Cafeteria Janitor Administration Machining Assembly 100,000 $60,000 Traced costs S360,000 $450,000 $560,000 Services provided to Services Cafeteria provided Janitorial 20% 10% 30% 35% 20% 20% 25% 20% 30% 30% 50% Administration 10%