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 difference in the two products is the raw material. The XL-D chip is the older 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 river. Several years ago, the company was ordered to treat the wastewater before its release, and it installed relatively expensive equipment. While the equipment is fully depreciated, annual operating expenses of $258,000 are still incurred for wastewater treatment. Two years ago, company scientists developed an alloy with all of the properties of the raw materials used in XL-D that generates no wastewater Some prototype components using the new matenol were produced and tested and found to be indistinguishable from the old components in every way relating to their fitness for use. The only difference is that the new alloy is more expensive than the old raw material. The company has been test-marketing the newer version of the component, referred to as XI. C. and is currently trying to decide its fate. Manufacturing of 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-D X units produced 100,00 25.03 Raw materol costs per unit $12.00 $18.00 Direct Labor hours per unit-Production 0.1 Direct laborehours per unit-Assembly 0.4 Oirect lebor rate per hour all labor $24.00 Machine hours per unr-Production 1. Hachine-hours per un tassebly 0.4 Testing hours per anit ( in production) 10 3. slipping weight par unit (pounds Mastester generate pent 520.00 10. OD folle Annual overhead costs for the two departments follow VO Production Department $ 105,000 97.000 158,00 25,000 400,000 Asy Department 3340,00 44,00 Supervision Material handling Testing Wastewater treatment Depreciation on rent Shipping Total 2.800 100.000 120,000 5520,00 ebook 11,016,800 The company president believes that it's foolish to continue producing two essentially equivalent products. At the same time the corporate image is somewhat tanished because of toxic dump found at another se not the Volley plant. The president would be to be able to post to the Valley plant as an example of company researd and development (R&D) working to wovide an environmentally friendly product. The controller points out to the president that the comparty financial position is why and it cannot afford to make products in any way other than the most cost efficient one Required: 3's current cost accounting system charges overhead to products based on the labor cost using a single plantiderate What product costs will report for the two products if the current allocation system is used b. The controller recently completed an executive education course describing the two stage allocation procedure. Assume that the first stage wiocanes COMS to departments and the second stage allocates costs to products. The controller begeves that the cost wel be more accurate it machine hours are used to locate Production Department costs and labor hours are used to ale Assembly Department costs What product costs will be reported for the two products in the two-stage allocation processed? d. The president argues that an activity based costing system would provide even better costs. The companyies to com product costs assuming an ABC system is implemented only in the Production Denment Overhead in Assembly we continuem de allocated based on director hours. The cost drivers elected for the activity based constare follow Item Driver Supervi Diret labore terial hand Material Te Test wastewater rent late print wa Overhead te Supervision Material handling Testing Wastewater treatient Depreciation on it Shipping w Det labore Material cost Testing hours Masteater crited Machinebours Weight 100 port What product costs would be reported if this ABC system were implemented? Assume that the production mix and costs would reman as originally planned Book Complete this question by entering your answers in the tabs below Required Required Required C's current cost accounting system charges overhead to products based on direct labor costing single plaiderate What product costs will report for the two product if the current location system and overtager to the nearest Whole percent and other intermediate cloution and to 2 decimal XUD UC Ruw mail Died labor Production Oirect labot - Assembly Overhead Total $ 600 000 5 Required What product costs would be reported it this ABC system were implemented Assume that the production mix and costs would remain as originally planned Complete this question by entering your answers in the tabs below. Required Required B Required The controler recently completed an executive education course describing the two-stage allocation procedure. Assume that the first stage allocates costs to departments and the second to allocates costs to products. The controller beleves 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 if the two-stage allocation process is used? (Round your intermediate calculations and final and Show less XLD XI 0001 0.00 Raw material Director - Production Direct labore Osthead Production Overhead. Assembly Total 000 000 000 0.00