I need the answers for the requirement # 3 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-HoursPrinting DepartmentBinding Department2,6006001,40013,60015,000Total hours3,200a. 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 Jjob if the company used the overhead ratesdeveloped in (2) above.* Answer is complete but not entirely correct.Complete this question by entering your answers in the tabs below.Req 1Reg 2Req 3ADetermine the amount of overhead cost that would be assigned to the job if the company used the overhead rates developedin requirement 1 above. Then determine the amount of overhead cost that would be assigned to the job if the company usedthe overhead rates developed in requirement 2. (Round your intermediate calculations to 2 decimal places and final answersto the nearest whole dollar amount.)Show less ATotalOverheadCostStep-down method$15,610 8Direct method15,590< Req 2Req 3A > Case 4B-6 (Algo) Step-Down Method versus Direct Method [LO4-10, LO4-11]"This Is really an odd situation," said Jim Carter, general manager of HIighland Publishing Company. "We get most of the jobs we bid onthat require a lot of press time in the Printing Department, yet profits on those jobs are never as high as they ought to be. On the otherhand, we lose most of the jobs we bid on that require a lot of time in the Binding Department. I would be inclined to think that theproblem is with our overhead rates, but we're already computing separate overhead rates for each department. So what else could bewrong?"Highland Publishing Company isa large organization that offers a variety of printing and binding work. The Printing and Bindingdepartments are supported by three service departments. The costs of these service departments are allocated to other departmentsin the order listed below. The Personnel cost is allocated based on number of employees. The Custodial Services cost is allocatedbased on square feet of space occupied and the Maintenance cost is allocated based on machine-hours.Number ofEmployeesMachine-Direct Labor-Total Labor- Square Feet ofSpace Occupied12,8003,80010,400DepartmentHoursHoursHoursPersonnel16,7008,30014,50030,400102,000171,90022Custodial Services47MaintenancePrintingBinding6940,30020,000169,00046,00020,00075,00010031087,300548215,00095,000Budgeted overhead costs in each department for the current year are shown below:$ 350,00065,30093,700419,000165,000$1,093,000PersonnelCustodial ServicesMaintenancePrintingBindingTotal budgeted costBecause of its simplicity, the company has always used the direct method to allocate service department costs to the two operatingdepartments.Requlred: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:

Working Notes: 1. Step Down Method: Personnel Custodial services Maintenance Printing Binding…

1. 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 labor-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 Binding departments. 3. Assume that during the current year the company bids on a job that requires machine and labor time as follows: Direct Machine-Hours Labor-Hours Printing Department Binding Department 2,600 1,400 13,600 15,000 600 Total hours 3,200 a. 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 rates developed in (2) above. Answer is complete but not entirely correct.