Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Automotive Products designs and produces automotive parts. Actual costs for 2019 were: Department Cost Driver Overhead Usage of cost drivers by customer contract GM Ford

image text in transcribed
Automotive Products designs and produces automotive parts. Actual costs for 2019 were: Department Cost Driver Overhead Usage of cost drivers by customer contract GM Ford Chrysler Total Design CAD hours $39,000 120 200 80 400 Production Engineering hrs. 29,600 100 60 240 400 Engineering Machine Hours 240.000 120 2.800 1,080 Total overhead 4.000 308,600 Pricing is based on a mark-up from cost. Ford has complained about the pricing, so our controller assigns you the task of determining if using peanut butter costing (one plant-side rate) is "good enough". 1. Calculate the overhead costs for Ford if there is one plant-wide rate based on machine hours. $ 2. Calculate the overhead costs for Ford if there are separate overhead allocation rates for design, production and engineering $ Is Ford correct to complain about the costs being assigped to their work

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Modernize Your Audit Department Five Critical Areas For Improvement

Authors: Toby DeRoche

1st Edition

B08FKW8B91, 979-8674160274

More Books

Students also viewed these Accounting questions