eztomheducation.com Capstone Project i Saved Koontz Company manufactures two models of industrial components-a Basic model and...

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eztomheducation.com Capstone Project i Saved Koontz Company manufactures two models of industrial components-a Basic model and an Advanced model. The company considers all of its manufacturing overhead costs to be fixed and uses plantwide manufacturing overhead cost allocation based on direct labor-hours. Koontz's controller prepared the segmented income statement shown below for the most recent year (he allocated selling and administrative expenses to products based on sales dollars): Number of units produced and sold Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income (loss) ces Basic 20,000 Advanced 10,000 Total 30,000 $ 3,000,000 2,300,000 700,000 720,000 $ 2,000,000 $ 5,000,000 1,350,000 650,000 3,650,000 480,000 1,350,000 1,200,000 $ (20,000) $ 170,000 $ 150,000 Direct laborers are paid $20 per hour. Direct materials cost $40 per unit for the Basic model and $60 per unit for the Advanced model. Koontz is considering a change from plantwide overhead allocation to a departmental approach. The overhead costs in the company's Molding Department would be allocated based on machine-hours and the overhead costs in its Assemble and Pack Department would be allocated based on direct labor-hours. To enable further analysis, the controller gathered the following information: Molding Assemble and Pack Manufacturing overhead costs $ 787,500 $ 562,500 Total $ 1,350,000 Direct labor hours: Basic Advanced Machine hours: Basic Advanced 10,000 5,000 20,000 10,000 30,000 15,000 12,000 10,000 12,000 10,000 Required: 1. Using the plantwide approach: a. Calculate the plantwide overhead rate. b. Calculate the amount of overhead assigned to each product. < Prev 3 of 4 Next > eztomheducation.com Capstone Project i Saved Koontz Company manufactures two models of industrial components-a Basic model and an Advanced model. The company considers all of its manufacturing overhead costs to be fixed and uses plantwide manufacturing overhead cost allocation based on direct labor-hours. Koontz's controller prepared the segmented income statement shown below for the most recent year (he allocated selling and administrative expenses to products based on sales dollars): Number of units produced and sold Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income (loss) ces Basic 20,000 Advanced 10,000 Total 30,000 $ 3,000,000 2,300,000 700,000 720,000 $ 2,000,000 $ 5,000,000 1,350,000 650,000 3,650,000 480,000 1,350,000 1,200,000 $ (20,000) $ 170,000 $ 150,000 Direct laborers are paid $20 per hour. Direct materials cost $40 per unit for the Basic model and $60 per unit for the Advanced model. Koontz is considering a change from plantwide overhead allocation to a departmental approach. The overhead costs in the company's Molding Department would be allocated based on machine-hours and the overhead costs in its Assemble and Pack Department would be allocated based on direct labor-hours. To enable further analysis, the controller gathered the following information: Molding Assemble and Pack Manufacturing overhead costs $ 787,500 $ 562,500 Total $ 1,350,000 Direct labor hours: Basic Advanced Machine hours: Basic Advanced 10,000 5,000 20,000 10,000 30,000 15,000 12,000 10,000 12,000 10,000 Required: 1. Using the plantwide approach: a. Calculate the plantwide overhead rate. b. Calculate the amount of overhead assigned to each product. < Prev 3 of 4 Next >