1 Requirements 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. Print Done x More Info She developed an ABC system very similar to the one used by King's chief rival. Part of the reason Johnson developed the ABC system was because King'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 labor hours that was developed years ago - Data Table Activity Allocation Base Materials handling .... Number of parts Machine setup Number of setups Insertion of parts Number of parts Finishing ... Finishing direct labor hours Activity Cost Allocation Rate $4.50 per part $325.00 per setup $31.00 per part $51.00 per hour Data Table Standard Deluxe Parts per wheel.. 4.0 6.0 Setups per 1,000 wheels 20.0 20.0 Finishing direct labor hours per wheel ... 3.0 Total direct labor hours per wheel....... 2.7 3.8 The company's managers expect to produce 1,000 units of each model during the year. 1.0 Print Dona Several years after reengineering its production process, King Corporation hired a new controller, Rachael Johnson. (Click the icon to view additional information.) For the upcoming year, King's budgeted ABC manufacturing overhead allocation rates are as follows: 3 Click the icon to view the additional data.) The number of parts is now a feasible allocation base because King recently installed a plantwide computer system. King produces two wheel models: Standard and Deluxe. Budgeted data for the upcoming year are as follows: (Click the icon to view the additional data.) Read the requirements Requirement 1. Compute the total budgeted manufacturing overhead cost for the upcoming year. (Enter the rates to two decimal places.) King Corporation Total Budgeted Indirect Manufacturing Costs Budgeted Quantity of Activity Cost Cost Allocation Base Allocation Rate Total Budgeted Indirect Cost Activity Materials handling Machine setups Insertion of parts Finishing Total budgeted indirect cost Requirement 2. Compute the manufacturing overhead cost per wheel of each model using ABC. (Round the cost allocation base to three decimals and cost per wheel to the nearest cent.) King Corporation ABC Indirect Manufacturing Cost per Unit Cost Quantity of Cost Allocation Allocated Activity Activity Allocation Rate Base Used By: Cost Per Wheel Standard Deluxe Standard Deluxe Materials handling Machine setup Insertion of parts Finishing Total ABC allocated indirect cost Requirement 3. Compute the company's traditional plantwide overhead rate. Use this rate to determine the manufacturing overhead cost per wheel under the traditional system. Begin by identifying the formula to compute the current plantwide manufacturing overhead rate, then compute the rate. (Round your answer to the nearest cent.) Plantwide overhead rate per DL hour Now use the plantwide overhead rate to determine the manufacturing overhead cost per wheel. (Round your answers to the nearest cent.) Manufacturing overhead Standard Deluxe