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The Western Mountain Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: B (Click the icon to view the department overhead budgets.) Management has decided that the most appropriate inventory costs are achieved by using individual department overhead rates. These rates are developed after support-department costs are allocated to operating departments. Bases for allocation are to be selected from the following: (Click the icon to view the data.) Read the requirements - x Data table $ 13,500 Support departments: Building and grounds Personnel General plant administration Cafeteria: Operating loss Storeroom Operating departments: Machining Assembly Total for support and operating departments 1,775 37,120 340 4,085 $ 56,820 $ 35,000 51,100 86.100 $ 142,920 Data table Direct Manufacturing Number of Labor-Hours Employees 0 0 0 0 Number of Requisitions 0 0 Indirect Manufacturing Labor-Hours 0 0 0 2,000 3,000 0 40 Department Building and grounds Personnel General plant administration Cafeteria: operating loss Storeroom Machining Assembly 0 Square Feet of Floor Space Occupied 0 2,500 4,000 2,000 1,000 27,500 113,000 150,000 0 10 0 0 5 0 55 9,000 9,000 8,000 14,000 3,000 2,000 140 18,000 250 27,000 5,000 Total Basis used is number of employees Requirement 1. 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 Personnel General plant administration Cafeteria: operating loss Storeroom 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.) Operating Departments Support Departments General Cafeteria Plant Operating Personnel Admin. Loss Bldg and Grounds Storeroom Machining Assembly Costs incurred Allocation of costs: Building and grounds Personnel General plant administration Cafeteria Storeroom Total budgeted costs of operating departments Overhead rate per direct manufacturing labor-hour Direct manufacturing labor-hours = Step-down method: Total costs allocated to department Machining Assembly Requirement 2. Using the direct method, rework requirement 1. Using the direct method, allocate support-department costs. (Round cost allocations to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs.) Operating Departments Support Departments General Cafeteria Plant Operating Personnel Admin. Loss Bldg and Grounds Storeroom Machining Assembly Costs incurred Allocation of costs: Building and grounds Personnel General plant administration Cafeteria Storeroom Total budgeted costs of operating departments Develop overhead rates per direct manufacturing labor-hour for machining and assembly using the direct method. (Round the overhead rates to three decimal places.) Direct method: Overhead rate per direct manufacturing labor-hour Total costs allocated to department Direct manufacturing labor-hours Machining Assembly Requirement 3. Based on the information about two jobs, determine the total overhead costs for each job by using rates developed in (a) requirement 1 and (b) requirement 2. Start by computing the total overhead costs for each job using the rates developed in (a) requirement 1 (the step-down method.) (Round the total overhead costs to the nearest cent.) (a) Step-down method: Total Overhead Costs Job 88 Machining Assembly Total cost of Job 88 Job 89 Machining Assembly Total cost of Job 89 Now compute the total overhead costs for each job using the rates developed in (b) requirement 2 (the direct method). (Round the total overhead costs to the nearest cent.) (b) Direct method: Total Overhead Costs Job 88 Machining Assembly Total cost of Job 88 Job 89: Machining Assembly Total cost of Job 89 The Western Mountain Company has prepared department overhead budgets for budgeted-volume levels before allocations as follows: B (Click the icon to view the department overhead budgets.) Management has decided that the most appropriate inventory costs are achieved by using individual department overhead rates. These rates are developed after support-department costs are allocated to operating departments. Bases for allocation are to be selected from the following: (Click the icon to view the data.) Read the requirements - x Data table $ 13,500 Support departments: Building and grounds Personnel General plant administration Cafeteria: Operating loss Storeroom Operating departments: Machining Assembly Total for support and operating departments 1,775 37,120 340 4,085 $ 56,820 $ 35,000 51,100 86.100 $ 142,920 Data table Direct Manufacturing Number of Labor-Hours Employees 0 0 0 0 Number of Requisitions 0 0 Indirect Manufacturing Labor-Hours 0 0 0 2,000 3,000 0 40 Department Building and grounds Personnel General plant administration Cafeteria: operating loss Storeroom Machining Assembly 0 Square Feet of Floor Space Occupied 0 2,500 4,000 2,000 1,000 27,500 113,000 150,000 0 10 0 0 5 0 55 9,000 9,000 8,000 14,000 3,000 2,000 140 18,000 250 27,000 5,000 Total Basis used is number of employees Requirement 1. 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 Personnel General plant administration Cafeteria: operating loss Storeroom 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.) Operating Departments Support Departments General Cafeteria Plant Operating Personnel Admin. Loss Bldg and Grounds Storeroom Machining Assembly Costs incurred Allocation of costs: Building and grounds Personnel General plant administration Cafeteria Storeroom Total budgeted costs of operating departments Overhead rate per direct manufacturing labor-hour Direct manufacturing labor-hours = Step-down method: Total costs allocated to department Machining Assembly Requirement 2. Using the direct method, rework requirement 1. Using the direct method, allocate support-department costs. (Round cost allocations to the nearest whole dollar. Use parentheses or a minus sign when decreasing departments by allocating costs.) Operating Departments Support Departments General Cafeteria Plant Operating Personnel Admin. Loss Bldg and Grounds Storeroom Machining Assembly Costs incurred Allocation of costs: Building and grounds Personnel General plant administration Cafeteria Storeroom Total budgeted costs of operating departments Develop overhead rates per direct manufacturing labor-hour for machining and assembly using the direct method. (Round the overhead rates to three decimal places.) Direct method: Overhead rate per direct manufacturing labor-hour Total costs allocated to department Direct manufacturing labor-hours Machining Assembly Requirement 3. Based on the information about two jobs, determine the total overhead costs for each job by using rates developed in (a) requirement 1 and (b) requirement 2. Start by computing the total overhead costs for each job using the rates developed in (a) requirement 1 (the step-down method.) (Round the total overhead costs to the nearest cent.) (a) Step-down method: Total Overhead Costs Job 88 Machining Assembly Total cost of Job 88 Job 89 Machining Assembly Total cost of Job 89 Now compute the total overhead costs for each job using the rates developed in (b) requirement 2 (the direct method). (Round the total overhead costs to the nearest cent.) (b) Direct method: Total Overhead Costs Job 88 Machining Assembly Total cost of Job 88 Job 89: Machining Assembly Total cost of Job 89

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