This is really an odd situation," said Jim Carter, general manager of Highland Publishing Company. "We get most of the jobs we bld on that require a lot of press time in the Printing Department, yet profits on those jobs are never as high as they ought to be. On the other hand, we lose most of the jobs we bid on that require a lot of time in the Binding Department. I would be inclined to think that the problem is with our overhead rates, but we're already computing separate overhead rates for each department. So what else could be wrong?" Highland Publishing Company is a large organization that offers a variety of printing and binding work. The Printing and Binding departments are supported by three service departments. The costs of these service departments are allocated to other departments In the order listed below. The Personnel cost is allocated based on number of employees. The Custodial Services cost is allocated based on square feet of space occupied and the Maintenance cost is allocated based on machine-hours. Total Labor- Square Feet of Department Hours Space Occupied Number of Employees Machine- Hours Direct Labor. Hours Personnel 16,500 12,400 26 Custodial Services 8,400 3,500 46 Maintenance 14,300 18,588 67 Printing 30,500 48,788 184 167,888 11,000 Binding 102,000 28,288 382 46,000 73,000 171,700 87,388 545 213,000 84,000 Budgeted overhead costs in each department for the current year are shown below: Personnel Custodial Services Maintenance Printing Binding Total budgeted cost $ 320,000 65,400 93,900 414,000 167,000 $ 1,060,300 Because of its simplicity, the company has always used the direct method to allocate service department costs to the two operating departments. Required: 1. Using the step-down method, allocate the service department costs to the consuming departments. 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. 2. Repeat (1) above, this time using the direct method. Again compute predetermined overhead rates in the Printing and Binding departments. 3. Assume that during the current year the company bids on a job that requires machine and labor time as follows: Printing Department Binding Department Total hours Machine-Hours 2,400 688 3,088 Direct Labor Hours 1,200 13,300 14,500 a. Determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in (1) above. Then determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in (2) above. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Using the step-down method, allocate the service department costs to the consuming departments. 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. (Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations. Round "Predetermined overhead rate" to 2 decimal places and rest of the answers to the nearest whole dollar amount.) Printing Binding 93,900 $ 414,000 $ 167,000 Personnel Custodial Services Maintenance Departmental costs before allocations $ 320,000 $ 65,400 $ Allocations: Personnel costs Custodial services costs Maintenance costs Total costs after allocations Predetermined overhead rate 320,000 65,400 93,900 414,000 167,000 < Req 1 Req 2 > Show less "This is really an odd situation," said Jim Carter, general manager of Highland Publishing Company. "We get most of the jobs we bid on that require a lot of press time in the Printing Department, yet profits on those jobs are never as high as they ought to be. On the other hand, we lose most of the jobs we bid on that require a lot of time in the Binding Department. I would be inclined to think that the problem is with our overhead rates, but we're already computing separate overhead rates for each department. So what else could be wrong?" Highland Publishing Company is a large organization that offers a variety of printing and binding work. The Printing and Binding departments are supported by three service departments. The costs of these service departments are allocated to other departments In the order listed below. The Personnel cost is allocated based on number of employees. The Custodial Services cost is allocated based on square feet of space occupied and the Maintenance cost is allocated based on machine-hours. Department Total Labor. Hours Square Feet of Space Occupied Number of Employees Machine- Hours Direct Labor- Hours Personnel 16,500 12,400 26 Custodial Services 8,400 3,588 46 Maintenance 14,388 18,588 67 Printing 30,500 48,788 104 167,888 11,000 Binding 102,000 28,200 382 46,088 171,700 87,388 545 213,888 73,000 84,000 Budgeted overhead costs in each department for the current year are shown below: Personnel Custodial Services Maintenance $ 320,000 65,400 93,900 Printing Binding Total budgeted cost 414,000 167,000 $ 1,060,300 Because of its simplicity, the company has always used the direct method to allocate service department costs to the two operating departments. Required: 1. Using the step-down method, allocate the service department costs to the consuming departments. 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. 2. Repeat (1) above, this time using the direct method. Again compute predetermined overhead rates in the Printing and Binding departments. 3. Assume that during the current year the company bids on a job that requires machine and labor time as follows: Direct Labor- Printing Department Binding Department Total hours Machine-Hours 2,400 Hours 1,200 688 3,088 13,300 14,500 a. Determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in (1) above. Then determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in (2) above. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Repeat requirement 1 above, this time using the direct method. Again compute predetermined overhead rates in the Printing and Binding departments. (Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations. Round "Predetermined overhead rate" to 2 decimal places and rest of the answers to the nearest whole dollar amount.) Personnel Custodial Services Maintenance Printing Binding Departmental costs before allocations $ 320,000 $ 65,400 $ 93,900 $ 414,000 $ 167,000 Allocations: Personnel costs Custodial services costs Maintenance costs Total costs after allocations Predetermined overhead rate 320,000 65,400 93,900 414,000 167,000 Show less A "This is really an odd situation," said Jim Carter, general manager of Highland Publishing Company. "We get most of the jobs we bid on that require a lot of press time in the Printing Department, yet profits on those jobs are never as high as they ought to be. On the other hand, we lose most of the jobs we bid on that require a lot of time in the Binding Department. I would be inclined to think that the problem is with our overhead rates, but we're already computing separate overhead rates for each department. So what else could be wrong?" Highland Publishing Company is a large organization that offers a variety of printing and binding work. The Printing and Binding departments are supported by three service departments. The costs of these service departments are allocated to other departments In the order listed below. The Personnel cost is allocated based on number of employees. The Custodial Services cost is allocated based on square feet of space occupied and the Maintenance cost is allocated based on machine-hours. Department Total Labor Hours Square Feet of Space Occupied Number of Employees Machine- Hours Direct Labor- Hours Personnel Custodial Services 16,500 8,400 12,400 26 3,588 46 Maintenance 14,300 10,588 67 Printing 38,500 48,700 104 167,888 11,000 Binding 102,000 28,288 302 46,000 73,000 171,700 87,380 545 213,888 84,000 Budgeted overhead costs in each department for the current year are shown below: Personnel Custodial Services Maintenance Printing Binding Total budgeted cost $ 320,000 65,400 93,900 414,000 167,000 $ 1,060,300 Because of its simplicity, the company has always used the direct method to allocate service department costs to the two operating departments. Required: 1. Using the step-down method, allocate the service department costs to the consuming departments. 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. 2. Repeat (1) above, this time using the direct method. Again compute predetermined overhead rates in the Printing and Binding departments. 3. Assume that during the current year the company bids on a job that requires machine and labor time as follows: Printing Department Binding Department Total hours Machine-Hours 2,488 Direct Labor- Hours 1,200 3,000 13,300 14,500 a. Determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in (1) above. Then determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in (2) above. Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed In requirement 1 above. Then determine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developed in requirement 2. (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Step-down method Direct method Total Overhead Cost < Req 2 Req SA > Show less