Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Check my w Chrom Co. manufactures two models, the XL and RD. It also has two departments, assembly and finishing. The company wants to assign

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Check my w Chrom Co. manufactures two models, the XL and RD. It also has two departments, assembly and finishing. The company wants to assign overhead costs to its two different models to better understand the profitability of each model. The Tableau Dashboard provides data for our analysis. Estimated Overhead Costs by Estimated Direct Labor Hours & Department Machine Hours by Department 150,000 hrs 125,000 hrs 100,000 hrs Finishing 100 000 75.000 hrs Assembly PODE Total: $8,000,000 50,000 hrs Assembly 25.000 hrs Finishing Finishing -30000 25000 Direct Labor Hours Machine Hours 1327 II Next > 2. The company's XL model requires 2 direct labor hours and 1 machine hour. The RD model requires 3 direct labor hours and 3 machine hours. (a) Compute the overhead cost per unit of each model using ABC. (b) Alternatively, compute the overhead cost per unit of each model using a single plantwide overhead rate based on direct labor hours. 3. The company gives a bonus to production managers based on their ability to lower the cost of their assigned model. a. Which overhead cost allocation method would the XL production manager prefer? b. Which overhead cost allocation method would tfie RD production manager prefer? Complete this question by entering your answers in the tabs below. Required 2A Required 2B Required 3 Compute the overhead cost per unit of each model using ABC. XL RD Activity Activity Rate Overhead Assigned Activity Driver Incurred Overhead Assigned Maintenance Supervision Overhead Cost Per Unit por MH per DLH Activity Driver Incurred MH DLH MH DLH Required 2A Required 2B Required 3 Alternatively, compute the overhead cost per unit of each model using a single plantwide overhead rate based on direct labor hours. Model Activity Driver Plantwide OH Rate OH Cost Per Unit DLH XL RD DLH Required 2A Required 28 Required 3 a. Which overhead cost allocation method would the XL production manager prefer? b. Which overhead cost allocation method would the RD production manager prefer? a. Which overhead cost allocation method would the XL production manager prefer? Which overhead cost allocation method would tho RD production manager prefer? b 1. Using data from the upper half of the dashboard, compute the company's assembly department overhead rate using direct labor hours. 2. Using data from the upper half of the dashboard, compute the company's finishing department overhead rate using machine hours. 1. Departmental overhead rate (Assembly) 2. Departmental overhead rate (Finishing)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Foundations A Pacific Rim Focus

Authors: Kathryn Bartol, Margaret Tein, Graham Matthews, Bishnu Sharma, Brenda Scott Ladd

3rd Edition

978-0070284944, 0070284946

Students also viewed these Accounting questions