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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

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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 Toyota Total Design Design hours Engineering Engineering hrs. Production Machine Hours Total overhead $3,500,000 1,200,000 4,900,000 $9.600.000 2,500 4,200 35,000 9,000 4,300 32,000 7,500 4,500 31,000 19,000 13,000 98,000 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. Calculate overhead rates to at least 1/100 of a cent. 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, engineering and production. $ Is Ford correct to complain about the costs being assigned to their work? (Indicate what percentage change there is in allocated costs, and which direction, as part of your answer.)

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