The Sendai Co. Ltd of Japan has budgeted costs in its various departments as follows for the coming year: Factory administration ¥270.000.000 Custodial services ¥68.760.000 Personnel ¥28.840.000 Maintenance ¥45.200.000 Machining - overhead ¥376.300.000 Assembly - overhead ¥175.900.000 Total cost ¥965.000.000 The Japanese currency is the yen, denoted by ¥. The company allocates service department costs to other departments in the order listed below. Department Number of employees Total labour-hours Square feet of space occupied Direct labour-hours Machine-hours Factory administration 12 - 5.000 - - Custodial services 4 3.000 2.000 - - Personnel 5 5.000 3.000 - - Maintenance 25 22.000 10.000 - - Machining 40 30.000 70.000 20.000 70.000 Assembly 60 90.000 20.000 80.000 10.000 Total 146 150.000 110.000 100.000 80.000 Machining and Assembly are operating departments; the other departments all act in a service capacity. The company does not make a distinction between fixed and variable service department costs. Factory Administration is allocated on the basis of total labour-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 Allocate service department costs to departments using the step method. Then compute predetermined overhead rates in the operating departments using a machine-hours basis in Machining and a direct labour-hours basis in Assembly. OBS: I know there already is a soloution to this problem, but I need the calculations to be elaborated.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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

Factory administration	¥270.000.000
Custodial services	¥68.760.000
Personnel	¥28.840.000
Maintenance	¥45.200.000
Machining - overhead	¥376.300.000
Assembly - overhead	¥175.900.000
Total cost	¥965.000.000

The Japanese currency is the yen, denoted by ¥. The company allocates service department costs to other departments in the order listed below.

Department	Number of employees	Total labour-hours	Square feet of space occupied	Direct labour-hours	Machine-hours
Factory administration	12	-	5.000	-	-
Custodial services	4	3.000	2.000	-	-
Personnel	5	5.000	3.000	-	-
Maintenance	25	22.000	10.000	-	-
Machining	40	30.000	70.000	20.000	70.000
Assembly	60	90.000	20.000	80.000	10.000
Total	146	150.000	110.000	100.000	80.000

Machining and Assembly are operating departments; the other departments all act in a service capacity. The company does not make a distinction between fixed and variable service department costs. Factory Administration is allocated on the basis of total labour-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

Allocate service department costs to departments using the step method. Then compute predetermined overhead rates in the operating departments using a machine-hours basis in Machining and a direct labour-hours basis in Assembly.

OBS: I know there already is a soloution to this problem, but I need the calculations to be elaborated.

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The answer has incorrect solutions. There is the right soloution on Bartleby: PROBLEM 4B-6 Step-Down Method versus Direct Method; Predetermined Overhead Rates LO4-10, LO4-11.

I just need to get the calculations from that answer elaborated. Thank you

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