1 Activity-Based Costing, Lean Operations, and the Costs of Quality Use ABC to allocate manufacturing overhead 3 Several years after reengineering its production process, Enke Corp. hired a new controller, Natalie Babin. She developed an ABC system very similar to the one used by Enke's chief rival, Northstar. Part of the reason Babin developed the ABC system was because Enke's profits had been declining, even though the company had shifted its product mix toward the product that had appeared most profitable under the old system. Before adopting the new ABC system, the company had used a plantwide overhead rate based on direct labour hours that was developed years ago. For the upcoming year, Enke's budgeted ABC manufacturing overhead allocation rates are as follows: 7 8 9 10 11 12 13 The number of parts is now a feasible allocation base because Enke recently purchased bar-coding technology. Enke 4 produces two wheel models: Standard and Deluxe. Budgeted data for the upcoming year are as follows: 15 16 1 Compute the total budgeted manufacturing overhead cost for the upcoming year. 2 Compute the manufacturing overhead cost per wheel of each model using ABC. 3 Compute the company's traditional plantwide overhead rate. Use this rate to determine the manufacturing overhead cost per wheel under the traditional system. Saving \& Submitting Solution 1 Save file to desktop. a. Create folder on desktop, and label COMPLETED EXCEL PROJECTS b. Save your solution in the folder you just created; add -solution-date to end of file name 2 Upload and submit your file to be graded. a. Navigate back to the activity window - screen where you downloaded the initial spreadsheet b. Click Choose button under step 3; locate the file you just saved and click Open c. Click Upload button under step 3 d. Click Submit button under step 4 Viewing Results 1 Click on Results tab in MyLab Accounting 2 Click on the Assignment you were working on 3 Click on Project link; this will bring up your Score Card 4 Within Score Card window, click on Live Comments Report (lower right) to download spreadsheet with feedback