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1. Calculate the budgeted cost of trophies and plaques based on a single plant-wide overhead rate, if total overhead is allocated based on total direct

1. Calculate the budgeted cost of trophies and plaques based on a single plant-wide overhead rate, if

total overhead is allocated based on total direct costs.

2. Calculate the budgeted cost of trophies and plaques based on departmental overhead rates, where

forming department overhead costs are allocated based on direct labor costs of the forming depart-

ment, and assembly department overhead costs are allocated based on total direct costs of the assem-

bly department.

3. Calculate the budgeted cost of trophies and plaques if Tarquin allocates overhead costs in each

department using activity-based costing.

4. Explain how the disaggregation of information could improve or reduce decision quality.

image text in transcribed
Tarquin's Trophies makes trophies and plaques and operates at capacity. Tarquin does large custom orders, such as the participant trophies for the Mishawaka Little League. The controller has asked you to compare plant- wide, department, and activity-based cost allocation. Tarquin's Trophies Budgeted Information For the Year Ended November 30, 2011 Forming Department Trophies Plaques Total Direct materials $13,000 $11,250 $24,250 Direct labor 15,600 9,000 24,600 Overhead Costs Setup 12,000 Supervision 10,386 Assembly Department Trophies Plaques Total Direct materials $ 2,600 $ 9,375 $11,975 Direct labor 7,800 10,500 18,300 Overhead costs Setup 23,000 Supervision 10,960 Setup costs vary with the number of batches processed in each department. The budgeted number of batches for each product line in each department is as follows: Trophies Plaques Forming department 40 116 Assembly department 43 103

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