Question

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

FactoryAdministration	$	994,245
CustodialServices		202,335
Personnel		28,650
Maintenance		122,120
Machining—overhead		921,900
Assembly—overhead		277,525
Total cost	$	2,546,775

The companyallocates service department costs to other departments in theorder listed below.

Department	Numberof Employees	Total Labor- Hours	Square Feet of Space Occupied	Direct Labor- Hours	Machine- Hours
FactoryAdministration	22	—	10,800	—	—
CustodialServices	15	7,000	7,200	—	—
Personnel	12	15,000	3,300	—	—
Maintenance	51	47,900	19,800	—	—
Machining	30	80,000	100,000	56,000	183,750
Assembly	120	240,000	40,000	216,000	61,250
	250	389,900	181,100	272,000	245,000

Machining and Assembly are operating departments; the otherdepartments are service departments. Factory Administration isallocated on the basis of labor-hours; Custodial Services on thebasis of square feet occupied; Personnel on the basis of number ofemployees; and Maintenance on the basis of machine-hours.

Required:

1.

Allocate service department costs to consuming departments bythe step-down method. Then compute predetermined overhead rates inthe operating departments using a machine-hours basis in Machiningand a direct labor-hours basis in Assembly. (Please enterallocations from a department as negative and allocations to adepartment as positive. The line should add across to zero. Do notround intermediate calculations. Round "Predetermined overheadrates" to 2 decimal places and other answers to the nearest wholedollar amount.)

2.

Allocate service department costs to consuming departments bythe direct method. Again, compute predetermined overhead rates inMachining and Assembly. (Please enter allocations from adepartment as negative and allocations to a department as positive.The line should add across to zero. Do not round intermediatecalculations. Round "Predetermined overhead rates" to 2 decimalplaces and other answers to the nearest whole dollaramount.)

3.	Assume that the company doesn’t bother with allocating servicedepartment costs but simply computes a single plantwide overheadrate based on total overhead costs (both service department andoperating department costs) divided by total direct labor-hours.Compute the plantwide overhead rate. (Round your answer to2 decimal places.)

4.	Suppose a job requires machineand labor time as follows:

	Machine-Hours	Direct Labor-Hours
MachiningDepartment	270	26
AssemblyDepartment	11	77
Total hours	281	103

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