California Circuits Company (3C) manufactures a variety of components. Its Valley plant specializes in two electronic components used in circuit boards. These components serve the same function and perform equally well The dierence in the two products is the raw material. The XL-D chip is the oder of the two components and is made with a metal that requires a wash prior to assembly Originally, the plant released the wastewater directly into a local ver. Several years ago, the company was ordered to treat the wastewater before its release and installed relatively expensive equipment. While the equipment is deprecated, awal operating expenses of $243.000 are still incurred for wastewater treatment Two years ago, company scientists developed anaboy with all of the properties of the raw materials used in that generates to wastewater Some peotype components using the new material were produced and tested and found to be indistinguishable from the old components in every way rating to the fitness for use. The only difference is that the new alkoy is more expensive than the old raw material. The company has been test marketing the newer version of the component, referred to as XL-C, and is currently trying to decide its fate Manufacturing both components begins in the Production Department and is completed in the Assembly Department. No other products are produced in the plant. The following provides information for the two components XL-O 100 000 $11.30 25 000 51330 Units produced Raw materials per un Dreator hours per Photo Det bor hours per und Ausby Direct laborate per hour aller Machine hours per und Production Machine hours per un Assembly Testing hours per unit (all in production) Shipping weight per unit (pounds) Wastewater generated per un gallons) Annual overhead costs for the two departments toow Production Department $93.000 900 143 000 Assy Department 5233000 Supervision Material handling Testing Wastewater treatment Depreciation on prent Sh 393 090 The company president believes that 's too sh to continue producing two essentially equivalent products Al the same time, the corporate image is somewhat famshed because of a coump found at another site of the Valley plant) The president would like to be able to point to the Valley plant as an example of company RSD working to provide an environmentally friendly product The controller points out to the president that the company's financial position is h y, and it cannot afford to make products in any way other than the most cost ecintone Required: a. 3C's current cost accounting system charges overhead to products based on direct labor cost using a single plantwide rate What product costs will report for the two products of the current allocation system is used? (Round Overhead percentage to the nearest whole number and other intermediate calculations and final answer to 2 decimal places) XUD XUC Raw material Direct labor - Production Direct labor - Assembly Overhead Total b. The controller recently completed an executive education course describing the two-stage allocation procedure. Assume that the first stage allocates costs to departments and the second stage allocales costs to products. The controller believes that the costs will be more accurate if machine hours are used to allocate Production Department costs and labor hours are used to allocate Assembly Department costs. What product costs will be reported for the two products of the two-stage allocation process is used? (Round your intermediate calculations and final answer to 2 decimal places.) XL-D XLC Raw material Direct labor - Production Direct labor - Assembly Overhead - Production Overhead - Assembly Total d. The president argues that an activity-based costing system would provide even better costs. The company decides to compute product costs assuming an ABC system is implemented only in the Production Department Overhead in Assembly will continue to be allocated based on direct labor cost. The cost drivers selected for the activity based costing system are (Round your intermediate calculations and final answer to 2 decimal places.) Overhead Item Supervision Material handling Testing Wastewater treatment Depreciation on equipment Shipping Driver Direct labor hours Material cost Testing hours Wastewater generated Machine hours Welight Raw material Direct labor - Production Direct labor-Assembly Overhead - Production Supervision Material handling Testing Waste treatment Depreciation Shipping Total production overhead Overhead - Assembly Total