Problem 4B-6 Step-Down Method versus Direct Method; Predetermined Overhead Rates [LO4-10, LO4- The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year: Factory Administrationn Custodial Services Personnel Maintenance Machining-overhead Assembly-overhead Total cost $ 994,245 202,33!5 28,650 122,120 921,900 277,52!5 $2,546,775 The company allocates service department costs to other departments in the order listed below. square pirect achine- Total Feet of Number of Labor- Space Labor- Machine- Department Employees Hours Occupied Hours Hours Factory Administrationn Custodial Services Personnel Maintenance Machining Assembly 15 12 51 30 120 250 10,800 7,000 7,200 15,000 3,300 47,900 19,800 80,000 100,000 56,000 183,750 240,000 40,000 216,000 61,250 389,900 181,100 272,000 245,000 Machining and Assembly are operating departments; the other departments are service departments. Factory Administration is allocated based on labor-hours; Custodial Services based on square feet occupied; Personnel based on number of employees; and Maintenance based on machine-hours. Required 1. Allocate service department costs to consuming departments by the step-down method. Then compute predetermined overhead rates in the operating departments using machine-hours as the allocation base in Machining and direct labor-hours as the allocation base in Assembly 2. Repeat 1) above, this time using the direct method. Again compute predetermined overhead rates in Machining and Assembly. 3. Assume that the company doesn't bother with allocating service department costs but simply computes a single plantwide overhead rate that divides the total overhead costs (both service department and operating department costs) by the total direct labor-hours. Compute the plantwide overhead rate 4. Suppose a job requires machine and labor time as follows