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The Central Valley Company has prepared department overhead budgets for budgeted volume levels before allocations as follows: Support departments: Building and grounds ............................................... $10,000 Personnel .............................................................. 1,000 General plant administration ........................................ 26,090 Cafeteria: operating loss ............................................. 1,640 Storeroom .............................................................. 2,670 Total for support departments ............................................... $41,400 Operating departments: Machining ............................................................. $34,700 Assembly .............................................................. 48,900 Total for operating departments ............................................... 83,600 Total for support and operating departments ................................ $125,000 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: 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 or
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