As you learned in the previous chapters, Current Designs has two main product linescomposite kayaks. which are handmade and very labourintensive, and rotomoulded kayaks, which require less labou r but use more expensive equipment. Current Designs' controller, Susan Wilson, is now evaluating several methods of assigning overhead to these products. It is important to ensure that costs are appropriately assigned to the company's products. At the same time, the system that is used must not be so complex that its costs are greater than its benets. Susan has decided to use the following activities and costs to evaluate the methods of assigning overhead. Activity Cost Designing new models 313 128,000 Creating and testing prototypes 171,000 Creating moulds for kayaks 195,000 Operating the oven for the rotomoulded kayaks 39,000 Operating the vacuum line for the composite kayaks 31,000 Supervising production employees 192,000 Curing (the time that is needed for the chemical processes to nish before the next step in the production process; many of these costs are related to the space required in the building} 204,000 Total $ 960.000 As Susan examines the data. she decides that the cost ofoperatingthe oven for the rotomoulded kayaks and the cost ofoperating the vacuum line forthe composite kayaks can be directly assigned to each of these product lines and do not need to be allocated with the other costs. For purposes of this analysis, assume that Current Designs uses $235,000 in direct labour costs to produce 1,000 composite kayaks and $321,250 in direct labou r costs to produce 4,000 rotomoulded kayaks each year. (a) One method of allocating overhead would assign the common costs to each product line by using an allocation basis such as the number of employees working on each type of kayak or the amount of factory space used for the production of each type of kayak. Susan knows that about 50% of the area of the plant and 50% of the employees relate to the composite kayaks, and the remaining space and other employees are used for the rotomoulded kayaks. Using this information, and remembering that the costs of operating the oven and the vacuum lines have been directly assigned, determine the total amount to be assigned to the composite kayak line and the rotomoulded kayak line, and the amount to be assigned to of the units in each line. [Round mist 055W per unit to 2 decimal places, e3. 125.25.) Composite Rotomaulded Totalcostassigned 55 l 55 l lCost assigned per unit 55 l 55 l eTextbook and Media Save for Later Attempts: O of 3 usod Using multiple attempts will impact you r score. 10% score reduction after attempt 2 (b) Another method of assigning overhead is to use direct labor dollars as an assignment basis. Remembering that the costs ofthe oven and the vacuum line have been assigned directly to the product lines, allocate the remaining costs using direct labor dollars as the allocation basis. Then, determine the amount of overhead that should be assigned to each unit of each product line using this method. {Roundcost assigned per unit to 2 decimafpa'aces, e.g. 125.25.) Total Senter a dollar amount Senter a dollar amount cost assigned Cost Senter a dollar amount rounded to 2 decimal places Senter a dollar amount rounded to 2 decimal places assigned per unit (C) Activitybased costing requires a cost driver for each cost pool. Use the following information to assign the costs to the product lines using the activitybased costing approach. Activity Cost Pools Cost Drivers Driver Driver Amount Amount for for Rotomolded Composite Kayaks Kayaks Designing new models Number of models Creating and testing prototypes Number of prototypes Creating molds for kayaks Number of molds Supervising production employees Number of employees Curing time Number of days of curing time What amount of overhead should be assigned to each composite kayak using this method? What amount of overhead should be assigned to each rotomolded kayak using this method? (Round cost assignedper unit to 2 decimal places, e.g. 125.25. J Total Senter a dollar amount Senter a dollar amount cost assigned Cost Senter a dollar amount rounded to 2 decimal places Senter a dollar amount rounded to 2 decimal places assigned per unit