5-21 Plantwide, department, and ABC indirect cost rates. Roadster Company (RC) designs and produces automotive parts. In 2020, actual variable manufacturing overhead is $280,000. RC's simple costing system allocates variable manufacturing overhead to its three customers based on machine-hours and prices its contracts based on full costs. One of its customers has regularly complained of being charged noncompetitive prices, so RC's controller Matthew Draper realizes that it is time to examine the consumption of overhead resources more closely. He knows that there are three main departments that consume overhead resources: design, production, and engineering. Interviews with the department personnel and examination of time records yield the following detailed information.

Home Insert Page Layout Formulas Data Review View A B C D E F Usage of Cost Drivers by Customer 1 Contract Manufacturing Southern Caesar Jupiter 2 Department Cost Driver Overhead in 2020 Motors Motors Auto 3 Design CAD-design-hours $ 35,000 150 250 100 4 Production Engineering-hours 25,000 130 100 270 5 Engineering Machine-hours 220,000 300 3,700 1,000 6 Total $280,000