General Textiles Company has prepared departmental overhead budgets for normal activity levels before reapportionment's as follows:

Building and grounds ..............................................$ 20,000

Personnel ......................................................................1,200

General factory administration* ..............................28,020

Cafeteria operating loss ..............................................1,430

Storeroom .....................................................................2,750

Machining ...................................................................35,100

Assembly ....................................................................56,500
                                                                                    $145,000

Management has decided that the most sensible product costs are achieved by using departmental overhead rates. These rates are developed after appropriate service department costs are allocated to production departments.

Cost drivers for allocation are to be selected from the following data:

Basis used is number of employees.

1. Allocate service-department costs by the step-down method. Develop overhead rates per direct-labour-hour for machining and assembly.

2. Same as requirement 1, using the direct method.

3. What would be the blanket plant wide factory overhead application rate, assuming that direct-labour-hours are used as a cost driver?

4. Using the following information about Job K10 and Job K11, prepare three different total overhead costs for each job, using rates developed in requirements 1, 2, and 3. 

                                            Direct-Labour-Hours
                                            Machining Assembly
Job K10 19 .......................................2
Job K12 3 .......................................18

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Square Number of Metres of Total Direct- Number of Department Labour Labour Employees Floor Space Occupied Requisitions Hours Hours Building and grounds Personnel* 2,000 General factory administration 35 7,000 Cafeteria 1,000 10 4,000 operating loss 1,000 Storeroom 5 7,000 Machining Assembly 5,000 50 30,000 8,000 3,000 15,000 100 50,000 17,000 1,500 20,000 200 100,000 27,000 4,500