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Exercise 5 - 6. ALLOCATION OF SERVICE DEPARTMENT COSTS The controller of MM Company estimates that factory overhead will be as follows for ts two producing departments and three service departments. Cutting department P 240,000 Finishing department 168,000 Maintenance department 40,340 Warehousing department 30,000 Factory office 65,000 The controller also provides the following tabulation of the interdependence of departments: Services provided by To Department Maintenance | Warehousing Factory office Cutting 15% 50% 62% Finishing 28 32 38 Maintenance 10 Warehousing 15 Factory office 12 8 The estimated direct labor cost for purposes of determining applied overhead rates are: Cutting department P 300,000 Finishing department 200,000 REQUIRED: On the basis of the foregoing information set up a schedule 1. Showing the three redistribution methods as follows: a. Direct method (Round to nearest peso) b. Step method. Distribute maintenance first. (Round to nearest peso) c. Linear algebra method 2. Compute the overhead application rate based on direct labor under each method. (Round to one decimal place only) 1. Direct Method 2. Step Method 3. Linear Algebra Method