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Business, 17.04.2020 16:49 Andrebutrus

The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year:

Factory Administration $ 825,470
Custodial Services 108,831
Personnel 28,970
Maintenance 60,569
Machining—overhead 633,098
Assembly—overhead 865,282
Total cost $ 2,522,220
The company allocates service department costs to other departments in the order listed below.
Department Number of
Employees Total
Labor-
Hours Square
Feet of
Space
Occupied Direct
Labor-
Hours Machine-
Hours
Factory Administration 27 — 7,000 — —
Custodial Services 10 7,200 11,900 — —
Personnel 24 19,100 8,000 — —
Maintenance 59 52,600 17,300 — —
Machining 76 120,000 45,000 61,000 140,800
Assembly 114 160,000 15,000 235,000 35,200
310 358,900 104,200 296,000 176,000

Machining and Assembly are operating departments; the other departments are service departments. Factory Administration is allocated on the basis of labor-hours; Custodial Services on the basis of square feet occupied; Personnel on the basis of number of employees; and Maintenance on the basis of 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 a machine-hours basis in Machining and a direct labor-hours basis in Assembly. (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 rates" to 2 decimal places and other answers to the nearest whole dollar amount.)

2.
Allocate service department costs to consuming departments by the direct method. Again, compute predetermined overhead rates in Machining and Assembly. (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 rates" to 2 decimal places and other answers to the nearest whole dollar amount.)

3.
Assume that the company doesn’t bother with allocating service department costs but simply computes a single plantwide overhead rate based on total overhead costs (both service department and operating department costs) divided by total direct labor-hours. Compute the plantwide overhead rate. (Round your answer to 2 decimal places.)

4. Suppose a job requires machine and labor time as follows:
Machine-Hours Direct
Labor-Hours
Machining Department 300 27
Assembly Department 10 80
Total hours 310 107

Compute the amount of overhead cost that would be assigned to the job if the overhead rates were developed using the stepdown method, the direct method, and the plantwide method. (Round intermediate calculations to 2 decimal places and final calculations to the nearest whole dollar.)

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