Please I need the required number 1 only because of the policies I will ask separately 2. Repeat (1) above, this time using the direct method. Again compute predetermined overhead rates in the Printing and Bindingdepartments.3. Assume that during the current year the company bids on a job that requires machine and labor time as follows:DirectMachine-HoursLabor-HoursPrinting DepartmentBinding Department2,6001,40013,600600Total hours3, 20015,000a. 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 ratesdeveloped in (2) above.Complete this question by entering your answers in the tabs below.Req 1Req 2Req 3AUsing the step-down method, allocate the service department costs to the consuming departments. Then compute predeterminedoverhead 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 adepartment as positive. The line should add across to zero. Do not round intermediate calculations. Round "Predetermined overheadrate" to 2 decimal places and rest of the answers to the nearest whole dollar amount.)Show lessaCustodialServicesPersonnelMaintenancePrintingBindingDepartmental costs before allocations$350,000 $65,300 $93,700 $419,000 $165,000Allocations:Personnel costs(350,000)Custodial services costsMaintenance costsTotal costs after allocationsPredetermined overhead rate65,30093,700419,000165,000Req 1Req 2 > "This is really an odd situation," said Jim Carter, general manager of Highland Publishing Company. "We get most of the jobs we bid onthat require a lot of press time in the Printing Department, yet profits on those jobs are never as high as they ought to be. On the otherhand, we lose most of the jobs we bid on that require a lot of time in the Binding Department. I would be inclined to think that theproblem is with our overhead rates, but we're already computing separate overhead rates for each department. So what else could bewrong?"Highland Publishing Company is a large organization that offers a variety of printing and binding work. The Printing and Bindingdepartments are supported by three service departments. The costs of these service departments are allocated to other departmentsin the order listed below. The Personnel cost is allocated based on number of employees. The Custodial Services cost is allocatedbased on square feet of space occupied and the Maintenance cost is allocated based on machine-hours.Total Labor-Square Feet ofSpace Occupied12,8003,80010,40040,30020,000Number ofMachine-Direct Labor-EmployeesDepartmentPersonnelCustodial ServicesHoursHoursHours16,7008, 30014,50030,400102,000171,9002247Maintenance69Printing10020,000169,00046, 000215,000Binding31075.00087,30054895,000Budgeted overhead costs in each department for the current year are shown below:Personnel$ 350,000Custodial ServicesMaintenancePrintingBinding65,30093,700419,000165,000Total budgeted cost$1,093,000Because of its simplicity, the company has always used the direct method to allocate service department costs to the two operatingdepartments.Required:1. Using the step-down method, allocate the service department costs to the consuming departments. Then compute predeterminedoverhead rates in the two operating departments. Use machine-hours as the allocation base in the Printing Department and directlabor-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 Bindingdepartments.3. Assume that during the current year the company bids on a job that requires machine and labor time as follows:DirectMachine-HoursLabor-Hours

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 la 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.) Show less Custodial Services Personnel Maintenance Printing Binding Departmental costs before allocations $ 350,000 S 65,300 $ 93,700 $ 419,000 $ 165,000| Allocations: Personnel costs (350,000) Custodial services costs Maintenance costs Total costs after allocations Predetermined overhead rate 65,300 93,700 419,000 165,000

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 la 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.) Show less Custodial Services Personnel Maintenance Printing Binding Departmental costs before allocations $ 350,000 S 65,300 $ 93,700 $ 419,000 $ 165,000| Allocations: Personnel costs (350,000) Custodial services costs Maintenance costs Total costs after allocations Predetermined overhead rate 65,300 93,700 419,000 165,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 34P: Kimball Company has developed the following cost formulas:...

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