Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Check my work manufactures three robot models: the A3B4, the BC11, and the C3PO. Dixon allocates manufacturing overhead to each Department. This year, the department

image text in transcribed

image text in transcribed

Check my work manufactures three robot models: the A3B4, the BC11, and the C3PO. Dixon allocates manufacturing overhead to each Department. This year, the department anticipates that it will incur upcoming year on machine-hours. A large portion of the company's manufacturing overhead costs is incurred by the Maintenance $100,000 in total costs. The following estimates pertain to the Estimated MachineEstimated Units Model A3B4 BC11 Hours e,eee 15,ee8 5,88e of Production 6,25e 5,888 2,5e8 Ed Smith, Dixon's cost accountant, suspects that unit costs are being distorted by using a single activity base to allocate Maintenanc Department costs to products. T hus, he is considering the implementation of activity-based costing (ABC) Under the proposed ABC method, the costs of the Maintenance Department would be allocatedto the following a using the number of work orders as an activity base. (1) the repairs pool and (2) the janitorial pool. Of the 2.000 work orders filed with the Maintenance Department each year, approximately 400 relate to repair activities, and 1,600 relate to janitorial activitie Machinery repairs correlate with the number of production runs of each robot model. Thus, the repairs pool would be al robots based on each model's corresponding number of production runs. Janitorial services correlate with square feet of producti space. Thus, the janitorial pool would be allocate model. The following table provides a summary of annual production run activity and square footage requirements. located to d to products based on the square feet of production space devoted to each robot 2 Model A384 BC11 C3PO Estimated Number ot Production Runs se 150 e0 Estimated Square Feet ot Production Space Used 5,000 25,800 10 points (Do not round intermediate calculations. Round your answers to 2 decimal places.) Required: eBook ka. Calculate the amount of Maintenance Department costs that would be allocated to each robot model (on a per-unit basis) using machine-hours as a single activity base b. Calculate the amount of Maintenance Department costs that would be allocated to each robot model (on a per-unit basis) using the proposed ABC method. Print a. A3B4 BC11 C3PO b. A3B4 BC11 C3PO per unit per unit per unit per unit per unit per unit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

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

Audit Of EPAs Fiscal 2012 And 2011 Consolidated Financial Statements

Authors: U.S. Environmental Protection Agency

1st Edition

1500624705, 978-1500624705

More Books

Students also viewed these Accounting questions