Car Plant (CP} designs and produces automate parts. In 2017, actual manufacturing overhead is $216.000. CP's simple casting system allocates manufachuring overhead to its three customers based on machine hours and prices its contracts based on tull costs. One crits customers has regularly comalained of being charged non moltive prices, C's controllar Davan Evane malzes that is time to examine cons.imp.on of owerhand resources more chay He knows that there are three main departments that ca Varad resources: design, production and enginea Ing. Interviews with the centment personal and ekarrination of me record yield the following detailed information: Cick the icon to view the Intormation.) Read the requirements i Data Table Requirement 1. Compute the iraulering verhead allocated to sustomer in 2017 using the rule weling system that uses rachine-hour av the alocation bene. Determine the forma readed to calcuna vastaad using the simale casting method and then calcu CP's manufacturing owerhard rate for 2017. Round your answer in the nearest cant) Manufacturing overhead rate Par machine hour Calouste the overhead allocated to cach customer using the simple pasarg method. (Round your answers to the nearest wolc dollar.) Usage of Cost Drivers by Customer Contract Manufacturing Hamlet Overhead in 2017 State Motors Molon Jerdon Auto $ 45.000 150 250 100 35.000 130 100 270 238.000 300 2,700 1,000 316.000 Overhead Department Cool Driver Design CAD-design-hours Engineering Engneering-hours Production Machine-hours Machine Hours Used Allocated Customer State Motors 5 Hamit Moon Total Print Dona eruon Auto Requirement 2. Compute the manufacturing Warhad allocated to each austomer in 2017 sing department had manuang card rAAA (Aivation und Dept = Desarmant.) Determine the formula sed to calculate the department based manufacturing overhead rales: - Merusaluring overheatrale by up CP 2017 manufacturing overtised rales by department are as follows: Manufacturing Overhead Rate Department by Department) Design per Engineering per Production Der Calculate the overhead allocated to each customer, by department using the departmertel iranufacturing overhead rales calculated in the previous step. Calculate the total ovetead vost for each deparment and each customer. Hamlet Jerdon State Motors Department Motors Auba Total Design Engineere Productor Auta Calculate the overhead allocated to each customer by daarmant, Laing the desertmental manufacturing overhead rares calculated in the previous step Close the total overneed cost for each department and each customer State Hamlet Jerdon Department Motors Motors Total san Engineering Production Total Requirement 3. Comment on your answers in requirements 1 and 2. Which customar do you think was complaining about being overcharged in the simple system tha nav department hasad rates are used to price contracts which customer wille unhappy? How would you respond to these Concerna? Under the simple custing system, was likely unhappy about their til, because the contract appears to have been . If the new department based rates are used to price contracts, wil likely be happier about their til. the new speriment-based rates are used in price contrams wil licly hc urhanpy. This is because their bils under the simple-cooling system appcer to have been 7. Using the copatentesca ratos, their bis wil he I the new department-hasad ratA AAA, CF should explain to the unhappy customers www the calculation was done and point out their high LSA | Requirement 4. Hun els might use the information available from its deparment-uy-department analysis of manufacturing overhead vos.s? (Select all that apply.) Other than for pricing CP San AR IRA tha Information from the department-based system A to sul targets over time to reduce both the cursurrpion of ach indirect resource and the unit six of the recouruss. 1. to examine and streamline its own operations so that there is max mum value-added from al indirect resources c. to availata amplayer pays OD to provide incentives to professional stall, Requirement 5. CPA managers are wondering if they should further refine the deparmant-y-department rating aystem imaan ABC system by icerrlying diffany Ads within each ApamantUnder what condition wuld it not be worthwhile to Marther refine the department cating system man ABC system? O A. If there wasn't much variation among contracts in the consump.on of activities within a department OB. If a single activity accounts for a stabla proportion of the department's costs. OC. Ignificant costs are incurred on different scivities within a dere trend, but each activity has the same tiver OD. Al of the above