Answer Happy

Additional Information: Summary Information Direct Labour (hours) Processing Time Headcount (employees) 10 7 Floorspace (square feet) 13,005 2,200 Overhead Costs (in $) 4,901,398 877,199 HQ 0 0 HR 0 0 Building 0 0 R+O 200,000 0 35 180 19,600 940,050 19,198,554 16,179,253 Manufacturing 237,422 0 350 460,902 33,923,386 Chemical Treating 0 1,820 3 28,483 845,325
Kay and Dee Manufacturing (K+D) has three business lines:< Repair and Overhead (R+O): Repair of truck transmissions.< Manufacturing: manufacturing of custom truck transmission parts Chemical Treating: cleaning of old parts They also have three support departments. Major activities of each department are:< Human Resources (HR): Payroll, HR staff, employee services, Union/Management relations. Costs for this service department are allocated based on Headcount.< Facility: buildings, building maintenance and related building costs. Costs for this service department are allocated based on area occupied.< Main Office (HQ): salaries for the President, VP, and Finance department. Costs for this service department are allocated based on Direct Labour hours.< Other financial information is in Appendix A.< REQUIRED:< 1. Briefly comment on the cost drivers for the support departments. (ie. Do you think they are appropriate, or can you recommend something better? Briefly explain your answer)< 2. Using the Direct Method, allocate overhead costs from the support departments to the business lines.< 3. Using the Step-down method, allocate overhead costs from the support departments to the business lines in the following order: 1st Building+ 2nd HQ 3rd HR 4. Using the Reciprocal Method, allocate overhead costs from the support departments to the business lines.<