Question
check the Excel template attached below, which you will use to answer the questions that follow. The following information applies to the questions displayed below.]
check the Excel template attached below, which you will use to answer the questions that follow.
The following information applies to the questions displayed below.] Cary Company manufactures two models of industrial componentsa Standard model and an Advanced Model. It has provided the following information with respect to these two products:
Standard | Advanced | |
---|---|---|
Number of units produced and sold | 20,000 | 10,000 |
Selling price per unit | $ 150 | $ 200 |
Direct materials per unit | $ 40 | $ 60 |
Direct labor cost per unit | $ 30 | $ 30 |
Direct labor-hours per unit | 1.50 | 1.50 |
The company considers all of its manufacturing overhead costs ($1,346,250) to be fixed and it uses plantwide manufacturing overhead cost allocation based on direct labor-hours.
3. Within the tab titled Activity Based Approach, go to the section called Product Margin Analysis. Create formulas (within cells B16 through C19) that calculate the amounts of overhead cost that should be allocated from each activity cost pool to each product. Also (in cells B21 through D21), create the formulas that are needed to compute the product margins for each product and the company as a whole (Hint: The product margin equals each products sales minus its direct materials, direct labor, and activity-based cost assignments). b. How much overhead cost is assigned from each of the four activities to the Standard and Advanced models? c. What is the product margin for the Standard model? The Advanced model?
Calibrl (body) v 11 VA A A , General Wras Text 2Y DX Delete db Analyze Data Peste BIU 1 av A == Merge & Center $ %, y Conditional Format Cell Formatting as Table Styles Sort & Filter Sensitivity Format v Find & Select D15 + X fx A B C D E F G H 1 j L M N 1 Standard Advanced Total 0% Activity Assemble and pack Machining Order processing Setups 2 3 4 5 5 0% 0% 0% 6 7 8 8 9 10 11 12 13 14 15 O 16 17 18 19 20 21 22 23 24 25 Charts Plantwice Approach Activity-Based Approach Activity-Based Cost Analysis Cost Allocation Comparison + Ready = + 70% Calibrl (body) v 11 VA A A , General Wras Text 2Y DX Delete db Analyze Data Peste BIU 1 av A == Merge & Center $ %, y Conditional Format Cell Formatting as Table Styles Sort & Filter Sensitivity Format v Find & Select D15 + X fx A B C D E F G H 1 j L M N 1 Standard Advanced Total 0% Activity Assemble and pack Machining Order processing Setups 2 3 4 5 5 0% 0% 0% 6 7 8 8 9 10 11 12 13 14 15 O 16 17 18 19 20 21 22 23 24 25 Charts Plantwice Approach Activity-Based Approach Activity-Based Cost Analysis Cost Allocation Comparison + Ready = + 70%
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