Automotive Products (AP) designs and produces automotive parts. In 2017, actual manufacturing overhead is $317,250. AP's simple costing system allocates 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 AP's controller Declan Donahue 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: B: (Click the icon to view the information.) Read the requirements. -X i Requirements 1. 2. 3. Compute the manufacturing overhead allocated to each customer in 2017 using the simple costing system that uses machine-hours as the allocation base. Compute the manufacturing overhead allocated to each customer in 2017 using department-based manufacturing overhead rates. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will be unhappy? How would you respond to these concerns? How else might AP use the information available from its department-by-department analysis of manufacturing overhead costs? AP's managers are wondering if they should further refine the department-by-department costing system into an ABC system by identifying different activities within each department. Under what conditions would it not be worthwhile to further refine the department costing system into an ABC system? 4. 5. Print Done X Data Table Usage of Cost Drivers by Customer Contract Northern Hamlet Motors Motors Jarrin Auto Manufacturing Overhead in 2017 Department Cost Driver Design CAD-design-hours Engineering Engineering-hours $ 44,100 120 210 90 80 50 260 33,150 240,000 Production Machine-hours 90 2,000 910 $ 317,250 Total Print Done Requirement 1. Compute the manufacturing overhead allocated to each customer in 2017 using the simple costing system that uses machine-hours as the allocation base. Determine the formula needed to calculate overhead using the simple costing method and then calculate AP's manufacturing overhead rate for 2017. (Round your answer to the nearest cent.) - Manufacturing overhead rate per machine hour Calculate the overhead allocated to each customer using the simple costing method. (Round your answers to the nearest whole dollar.) Machine Overhead Customer Hours Used Allocated Northern Motors Hamlet Motors Jarrin Auto Requirement 1. Compute the manufacturing overhead allocated to each customer in 2017 using the simple costing system that uses machine-hours as the allocation base. Determine the formula needed to calculate overhead using the simple costing method and then calculate AP's manufacturing overhead rate for 2017. (Round your answer to the nearest cent.) Manufacturing overhead rate per machine hour Machine hours per customer Machine hours per department mer using the simple costing method. (Round your answers to the nearest whole dollar.) Manufacturing overhead per customer Overhead Manufacturing overhead per department Allocated Total machine hours Total manufacturing overhead Hamlet Motors Jarrin Auto Requirement 2. Compute the manufacturing overhead allocated to each customer in 2017 using department-based manufacturing overhead rates. (Abbreviations used: Dept. = Department.) Determine the formula used to calculate the department-based manufacturing overhead rates: + Manufacturing overhead rate by dept. AP's 2017 manufacturing overhead rates by department are as follows: Manufacturing Overhead Rate (by Department) per Department Design Engineering Production per per Calculate the overhead allocated to each customer, by department, using the departmental manufacturing overhead rates calculated in the previous step. Calculate the total overhead cost for each department and each customer. Northern Hamlet Jarrin Department Motors Motors Auto Total Design Engineering Production Total Requirement 2. Compute the manufacturing overhead allocated to each customer in 2017 using department-based manufacturing overhead rates. (Abbreviations used: Dept. = Department.) Determine the formula used to calculate the department-based manufacturing overhead rates: = Manufacturing overhead rate by dept. epartment are as follows: Icturing Overhead Rate (by Department) A Machine hours per dept. Manufacturing overhead per customer Manufacturing overhead per dept. [Total hours per dept. E Total machine hours Total manufacturing overhead F per per per AP's 2017 manufacturing overhead rates by department are as follows: V Manufacturing Overhead Rate Department (by Department) Design per Engineering per Production per CAD-design hour engineering hour Calculate the overhead allocated to each customer the previous step. Calculate the total overhead cos machine hour departmental manufacturing overhead rates calculated in each customer. Northern Hamlet Jarrin Department Motors Motors Auto Total Requirement 3. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will be unhappy? How would you respond to these concerns? Under the simple-costing system, was likely unhappy about their bill, because the contract appears to have been If the new department-based rates are used to price contracts, will likely be happier about their bill. If the new department-based rates are used to price contracts, will likely be unhappy. This is because their bills under Using the department-based rates, their bills will be V the simple-costing system appear to have been If the new department-based rates are used, AP should explain to the unhappy customers how the calculation was done, and point out their high use of relative to Requirement 3. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will be unhappy? How would you respond to these concerns? Under the simple-costing system, was likely unhappy about their bill, because the contract appears to have been If the new department-based rates a ntracts, will likely be happier about their bill. Hamlet If the new department-based rates contracts, will likely be unhappy. This is because their bills under Jarrin the simple-costing system appear V. Using the department-based rates, their bills will be Northern If the new department-based rates are used, AP should explain to the unhappy customers how the calculation was done, and point out their high use of relative to Requirement 3. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will be unhappy? How would you respond to these concerns? Under the simple-costing system, was likely unhappy about their bill, because the contract appears to have been If the new department-based rates are used to price contracts, V will likely be happier about their bill. overcosted If the new department-based rates are used to price contracts, er will likely be unhappy. This ist Using the department-based rates, their bills will be undercosted the simple-costing system appear to have been If the new department-based rates are used, AP should explain to the unhappy customers how the calculation was done, and point out their high use of relative to Requirement 3. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will be unhappy? How would you respond to these concerns? Under the simple-costing system, was likely unhappy about their bill, because the contract appears to have been If the new department-based rates are used to price contracts, will likely be happier about their bill. If the new department-based rates are used to price contracts the simple-costing system appear to have been Hamlet will likely be unhappy. This is because their bills under tment-based rates, their bills will be Jarrin Northern customers how the calculation was done, and point out their If the new department-based rates are used, AP should expla high use of relative to Requirement 3. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will be unhappy? How would you respond to these concerns? If Under the simple-costing system, was likely unhappy about their bill, because the contract appears to have been the new department-based rates are used to price contracts, will likely be happier about their bill. If the new department-based rates are used to price contracts, will likely be unhappy. This is because their bills under the simple-costing system appear to have been ates, their bills will be Hamlet and Jarrin the calculation was done, and point out their If the new department-based rates are used, AP should explain high use of relative to Northern and Hamlet ] Northern and Jarrin Requirement 4. How else might AP use the information availab rtment analysis of manufacturing overhead contosalaat all that only Requirement 3. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will be unhappy? How would you respond to these concerns? Under the simple-costing system, was likely unhappy about their bill, because the contract appears to have been If the new department-based rates are used to price contracts, will likely be happier about their bill. If the new department-based rates are used to price contracts, the simple-costing system appear to have been will likely be unhappy. This is because their bills under Using the department-based rates, their bills will be 7 unhappy customers how the calculation was done, and point out their If the new department-based rates are used, AP high use of overcosted undercosted Requirement 4. How else might AP use the info costs? (Select all that apply.) its department-by-department analysis of manufacturing overhead Requirement 3. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will be unhappy? How would you respond to these concerns? If Under the simple-costing system, was likely unhappy about their bill, because the contract appears to have been the new department-based rates are used to price contracts, will likely be happier about their bill. If the new department-based rates are used to price contracts, will likely be unhappy. This is because their bills under Using the department-based rates, their bills will be the simple-costing system appear to have been ut their If the new department-based rates are used, AP should explain to the unhappy customers how the calculation was d high use of relative to higher lower nead Requirement 4. How else might AP use the information available from its department-by-department analysis of mai costs? (Select all that apply.) Requirement 3. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will be unhappy? How would you respond to these concerns? If Under the simple-costing system, was likely unhappy about their bill, because the contract appears to have been the new department-based rates are used to price contracts, will likely be happier about their bill. If the new department-based rates are used to price contracts, will likely be unhappy. This is because their bills under Using the department-based rates, their bills will be the simple-costing system appear to have been If the new department-based rates are used, AP should explain to the unhappy customers how the calculation was done, and point out their high use of v relative to Requiremel costs? (Sele available from its department-by-department analysis of manufacturing overhead design and engineering resources Other than f production machine hours om the department-based system Requirement 3. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will be unhappy? How would you respond to these concerns? If Under the simple-costing system, was likely unhappy about their bill, because the contract appears to have been the new department-based rates are used to price contracts, will likely be happier about their bill. If the new department-based rates are used to price contracts, will likely be unhappy. This is because their bills under Using the department-based rates, their bills will be the simple-costing system appear to have been If the new department-based rates are used, AP should explain to the unhappy customers how the calculation was done, and point out their high use of relative to Requirement 4. How else might AP use the information ava costs? (Select all that apply.) ialysis of manufacturing overhead design and engineering resources production machine hours Other than for pricing, AP can also use the information from A. to provide incentives to professional staff. to revoluat amalannalon Requirement 4. How else might AP use the information available from its department-by-department analysis of manufacturing overhead costs? (Select all that apply.) Other than for pricing, AP can also use the information from the department-based system A. to provide incentives to professional staff. B. to reevaluate employee pay scales. O C. to examine and streamline its own operations so that there is maximum value-added from all indirect resources. D. to set targets over time to reduce both the consumption of each indirect resource and the unit costs of the resources. Requirement 5. AP's managers are wondering if they should further refine the department-by-department costing system into an ABC system by identifying different activities within each department. Under what conditions would it not be worthwhile to further refine the department costing system into an ABC system? O A. If a single activity accounts for a sizable proportion of the department's costs. OB. If there wasn't much variation among contracts in the consumption of activities within a department. OC. If significant costs are incurred on different activities within a department, but each activity has the same cost driver. OD. All of the above. Choose from any list or enter any number in the input fields and then continue to the next