Using the step-down method, allocate support-department costs. Develop overhead rates per direct manufacturing labor-hour for machining and assembly. Allocate the costs of the support departments in the order given in this problem. Use the allocation base for each support department you think is most appropriate.

Begin by selecting the allocation base for each support department.

Support Department	Allocation Base
Building and grounds	Square feet of floor space occupied
Personnel	Number of employees
General plant administration	Manufacturing labor-hours
Cafeteria: operating loss	Number of employees
Storeroom	Number of requisitions

Part 2

Using the step-down method, allocate support-department costs. Allocate the costs of the support departments in the order given in this problem. (Round all indirect allocation rates to the nearest cent and all other computations to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs.)

		Support Departments	Operating Departments
				General	Cafeteria
		Bldg and		Plant	Operating
		Grounds	Personnel	Admin.	Loss	Storeroom	Machining	Assembly
Costs incurred	45000	675	30870	810	8864	36600	48000
Allocation of costs:
	Building and grounds	45000	225	2700	1800	360	14400	25515
	Personnel		(900)	180	90	36	360	234
	General plant administration			(33750	2700	9260	51360
	Cafeteria
	Storeroom
Total budgeted costs of operating departments

The manager of machining department wouldsincesinceamount of overhead costs being allocated to the machining department.

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