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3 PART QUESTION SHOW WORK FOR THUMBS AND RATING

Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $472,200 Number of setups 600 Ordering costs 403,200 Number of orders 19,200 Machine costs 727,600 Machine hours 42,800 Receiving 416,000 Receiving hours 10,400 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $609,000 $783,000 469,000 457,000 Direct labor Units completed 15,200 7,800 6,200 380 Direct labor hours Number of setups Number of orders Machine hours Receiving hours 2,100 220 12,600 18,700 6,600 24,100 3,700 6,700 The company's normal activity is 8,300 direct labor hours. Required: Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round Intermediate calculations and final answers to nearest cent. Unit Cost Model A Model B 2. Determine the unit cost for each model using the four activity drivers. Round your answers to nearest cent. Unit Cost Model A Model B 3. Which method produces the more accurate cost assignment? MadALA Direct labor hours Four activity drivers Suces the more accurate cost assignment? dropdown TDABC Bob Russo, cost accounting manager for Hemple Products, was asked to determine the costs of the activities performed within the company's Manufacturing Engineering Department. The department has the following activities: creating bils of materials (OMS), studying manufacturing capabilities, Improving manufacturing processes, training employees, and designing tools. The resource costs (from the general ledger) and the times to perform one unit of each activity are provided below. Resource Costs Activities Unit Time Driver Salaries $397,000 Creating BOMS 0.7 hr No. of BOMS Equipment 102,000 Designing tools 2 hrs. No. of tool designs Supplies 21,000 Improving processes 0.9 hrs Process Improvement hrs. Total $520,000 Training employees 1.8 hrs No. of training sessions Studying capabilities 1.8 hrs. Study hours Total machine and labor hours (at practical capacity): Machine hours 2,000 Engineering hours 18,000 Total hours 20,000 The activity, designing tools, uses the number of tools designed as the activity driver. Using a traditional approach, the cost of the designing tools activity was determined to be $190,000 with an expected activity output of 1,000 for the coming year During the first week of the year, two jobs (Job 150 and Job 151) had a demand for 10 and 20 new tools, respectively. Boud Required: 1. Calculate the capacity cost rate for the Manufacturing Engineering Department. Round your answer to the nearest cent. per hour 2. Using the capacity cost rate, determine the activity rates for each activity. Round your answers to the nearest cent. Activity Rates Creating BOMS per BOM Designing tools per tool design Improving processes s per process Improvement hr. Training employees per training session Studying capabilities per study hour 3. Calculate the cost of designing tools that would be assigned to each job using the TDABC-derived activity rate and then repeat using the traditional ABC rate. Job 150 Job 151 TDABC s ABC 4. Now suppose that time for creating BOMs is 0.7 for a standard product but that creating a BOM for a custom product adds an additional 0.5 hour. Express the time equation for this added complexity. Round your answers to two decimal places. Place the amounts left to right, lowest to highest. BOM time = Calculate the activity rate for the activity of creating a BOM for custom products. Round your answer to the nearest cent. per BOM Unit-Based Versus Activity-Based Costing Fisico Company produces exercise bikes. One of its plants produces two versions: a standard model and a deluxe model. The deluxe model has a wider and sturdier base and a variety of electronic gadgets to help the exerciser monitor heartbeat, calories burned, distance traveled, etc. At the beginning of the year, the following data were prepared for this plant: Standard Model Deluxe Model Expected quantity 30,000 15,000 Selling price $370 $700 Prime costs $4.5 million $5.25 million Machine hours 37,500 37,500 Direct labor hours 75,000 75,000 Engineering support (hours) 13,500 31,500 Receiving (orders processed) 3,000 4,500 Materials handling (number of moves) 15,000 45,000 Purchasing (number of requisitions) 750 1,500 Maintenance (hours used) 6,000 24,000 Paying suppliers (involces processed) 3,750 3,750 Setting up batches (number of setups) 60 540 Additionally, the following overhead activity costs are reported: Maintenance $600,000 Engineering support 900,000 Materials handling 1,200,000 Setups 750,000 450,000 Purchasing Receiving Paying suppliers 300,000 300,000 $4,500,000 Required: 1. Calculate the cost per unit for each product using direct labor hours to assign all overhead costs. Unit cost Standard Deluxe 2. Calculate activity rates. Activity Rates Maintenance per hour used Engineering support per hour Materials handling per move Setups per setup Purchasing per requisition Receiving per order Paying suppliers per invoice Determine the cost per unit. If required, round your final answers to the nearest cent. Cost Standard per unit Deluxe per unit Compare these costs with those calculated using the unit-based method. Which cost is the most accurate