Chapter $5$ Assignment

$5-18$ Plant$-$wide, department, and activity cost rates. $($LO $2,$

Acclaim Inc. makes two styles of trophies, basic and deluxe,

and operates at capacity. Acclaim does large custom orders.

Acclaim budgets to produce $10,000$ basic trophies and $5,000$

deluxe trophies. Manufacturing takes place in two production

departments: forming and assembly. In the forming department,

indirect manufacturing costs are accumulated in two cost pools,

setup and general overhead. In the assembly department, all

indirect manufacturing costs are accumulated in one general

overhead cost pool. The basic trophies are formed in batches of

$200$ but because of the more intricate detail of the deluxe

trophies, they are formed in batches of $50.$

The controller has asked you to compare plant$-$wide,

department, and activity$-$based cost allocation.

Acclaim Budgeted Information for the Year Ended November $30$

Required

Calculate the budgeted unit cost of basic and deluxe

trophies based on a single plant$-$wide overhead rate, if total

overhead is allocated based on total direct costs. $($Don$\text{'}$t

forget to include direct material and direct manufacturing

labour cost in your unit cost calculation.$)$

Calculate the budgeted unit cost of basic and deluxe

trophies based on departmental overhead rates, where

forming department overhead costs are allocated based on

direct manufacturing labour costs of the forming

department and assembly department overhead costs are

allocated based on total direct manufacturing labour costs

of the assembly department.

Calculate the budgeted unit cost of basic and deluxe

trophies if Acclaim allocates overhead costs in each

department using activity$-$based costing, where setup costs

are allocated based on number of batches and general

overhead costs for each department are allocated based on