Company manufactures wheel rims. The controller budgeted ABC allocation rates for $2024.$ Eaton produces two wheel rim$$ models: standard and deluxe. Budgeted data for $2024$ are as$$ follows:

LOADING...$($Click the icon to view the $2024$ allocation rates and budgeted$$ data.$)$

LOADING...$($Click the icon to view additional$$ information, budgeted information and the deluxe unit cost$$ calculation.$)$

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Part $1$

Controller Mike Burns is surprised by the increase in cost of the deluxe model under ABC. He had a market research study conducted.

LOADING...$($Click the icon to view the results of the market$$ research.$)$

Would implementing the value engineering recommendation enable Eaton to achieve its target cost for the deluxe$$ rim?

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Part $1$

Begin by selecting the formula to allocate overhead$($OH$)$ costs. Then enter the amounts to calculate the revised finishing activity cost per rim.

Actual qty of the allocation base used

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Predetermined OH allocation rate

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Allocated mfg$.$ overhead costs

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