Chapter $4$Required:$1.$ Using the step$-$down method, allocate the service department costs to the consuming depart$-$ments. 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$\mathrm{.}2.$ Repeat $(1)$ above, this time using the direct method. Again compute predetermined overhead rates in the Printing and Binding departments.Assume during the current year the company bids on a job requiring machine and labor time as follows:Machine$-$Hours$15,40080016,200$DirectLabor$-$Hours$9002,0002,900$Printing Department.Binding Department.Total hoursa. Calculate the overhead cost assigned to the job if the company used the overhead rates developed in $(1)$ above. Then calculate the overhead cost assigned to the job if the company used the overhead rates developed in $(2)$ above.b$.$Explain to Mr$.$ Carter, the general manager, why the step$-$down method provides a better basis for computing predetermined overhead rates than the direct method.