Problem 4B-6 Step-Down Method versus Direct Method; Predetermined Overhead Rates [L04-10, LO4-11] The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year. Factory Administration Custodial Services Personnel Maintenance Machining-overhead Assembly-overhead Total cost $563,850 146, 440 49,332 155,588 864,540 1,306,050 $3,085,800 The company allocates service department costs to other departments in the order listed below Square Total Feet of Direct Number of Labor- Space Labor- Machine- Department Employees Hours Occupied HoursHours Factory Administration Custodial Services Personnel Maintenance Machining Assembly 23 12,600 7,900 11,800 15,000 5,300 53,000 18,600 12 56 60 90 250 120,000 96,000 123,000 174,000 180,000 24,000 258,000 87,000 375,900 168,300 381,000 261,000 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 Problem 4B-6 Step-Down Method versus Direct Method; Predetermined Overhead Rates [L04-10, LO4-11] The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year. Factory Administration Custodial Services Personnel Maintenance Machining-overhead Assembly-overhead Total cost $563,850 146, 440 49,332 155,588 864,540 1,306,050 $3,085,800 The company allocates service department costs to other departments in the order listed below Square Total Feet of Direct Number of Labor- Space Labor- Machine- Department Employees Hours Occupied HoursHours Factory Administration Custodial Services Personnel Maintenance Machining Assembly 23 12,600 7,900 11,800 15,000 5,300 53,000 18,600 12 56 60 90 250 120,000 96,000 123,000 174,000 180,000 24,000 258,000 87,000 375,900 168,300 381,000 261,000 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