All necessary workings should be shown. Where appropriate, secondary sources of information used in your report should be referenced accordingly. All solutions must be in a MS Word format, font 12, margins of 1 inch all sides on letter-sized paper and double-spaced except for numerical workings which can be single- spaced. 1. Liberal Minority Inc. (LMI) is plastic injection molding company specializing in front-end grilles. For 2019, it estimated overhead costs of $12,560,000 to be allocated using an activity-based costing system (see the table below). LMI also estimated that direct labour will be paid at the rate of $15 per hour. Activity Cost Pool Total Quantity of Allocation Base Estimated Cost Driver Cost (allocation base) $ 1,450,000 Direct materials 2,000,000 Direct labour $6,590,910 100,000 hours Indirect materials Indirect labour and supervision Utilities 3,598,000 Power consumption 4,200,000 Inspection 1,312,000 Machine usage $12,560,000 20,000 kilowatt-hours (kWh) 15,000 inspections 160,000 machine-hours Inspection Depreciation During January 20X5, Gilbert worked on two jobs, which consumed the following resources: Direct materials cost Direct labour cost Machine-hours Number of inspections Power consumed (kWh) Number of units Job 2015-A1 $ 6,500 $42,000 1,800 200 800 Job 2015-A2 $ 22,000 $165,000 7,000 200 800 20 100 At the end of the year, LMI recorded the consumption of resources as follows: direct materials, $6,660,800; direct labour, 101,540 hours; machine-hours, 158,700; power consumption, 20,370 kilowatt-hours; number of inspections, 14,780. The company also recorded actual overhead amounting to $12,538,250. Required: a) Compute the activity rate for each activity cost pool. b) Compute the cost per unit using activity-based costing. c) Determine the total manufacturing overhead applied to jobs during the year. d) Calculate the under-or overapplied overhead for the year and show how you will dispose of this amount at the end of the year. All necessary workings should be shown. Where appropriate, secondary sources of information used in your report should be referenced accordingly. All solutions must be in a MS Word format, font 12, margins of 1 inch all sides on letter-sized paper and double-spaced except for numerical workings which can be single- spaced. 1. Liberal Minority Inc. (LMI) is plastic injection molding company specializing in front-end grilles. For 2019, it estimated overhead costs of $12,560,000 to be allocated using an activity-based costing system (see the table below). LMI also estimated that direct labour will be paid at the rate of $15 per hour. Activity Cost Pool Total Quantity of Allocation Base Estimated Cost Driver Cost (allocation base) $ 1,450,000 Direct materials 2,000,000 Direct labour $6,590,910 100,000 hours Indirect materials Indirect labour and supervision Utilities 3,598,000 Power consumption 4,200,000 Inspection 1,312,000 Machine usage $12,560,000 20,000 kilowatt-hours (kWh) 15,000 inspections 160,000 machine-hours Inspection Depreciation During January 20X5, Gilbert worked on two jobs, which consumed the following resources: Direct materials cost Direct labour cost Machine-hours Number of inspections Power consumed (kWh) Number of units Job 2015-A1 $ 6,500 $42,000 1,800 200 800 Job 2015-A2 $ 22,000 $165,000 7,000 200 800 20 100 At the end of the year, LMI recorded the consumption of resources as follows: direct materials, $6,660,800; direct labour, 101,540 hours; machine-hours, 158,700; power consumption, 20,370 kilowatt-hours; number of inspections, 14,780. The company also recorded actual overhead amounting to $12,538,250. Required: a) Compute the activity rate for each activity cost pool. b) Compute the cost per unit using activity-based costing. c) Determine the total manufacturing overhead applied to jobs during the year. d) Calculate the under-or overapplied overhead for the year and show how you will dispose of this amount at the end of the year
