Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller identified two activities and their budgeted costs: $1,064,000 Setting

image text in transcribed
image text in transcribed
image text in transcribed
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller identified two activities and their budgeted costs: $1,064,000 Setting up equipment Other overheard $1,120,000 Setting up equipment is based on setup hours, and other overhead is based on oven hours. Wellington produces two products, Fudge and Cookies. Information on each product is as follows: Fudge Cookies Units produced 8,000 445,000 15,200 3,800 Setup hours Oven hours 1,000 7,000 Required: Round your answers to the nearest whole dollar, unless otherwise directed. 1. Calculate the activity rate for (a) setting up equipment and (b) other overhead. per setup hour a. Setting up equipment b. Other overhead per oven hour 2. How much total overhead is assigned to Fudge using ABC? 3. What is the unit overhead assigned to Fudge using ABC? Round to the nearest cent. per unit 4. Now, ignoring the ABC results, calculate the plantwide overhead rate, based on oven hours. Round to the nearest cent. per oven hour Fudge Cookies Units produced 8,000 445,000 Setup hours 15,200 3,800 Oven hours 1,000 7,000 Required: Round your answers to the nearest whole dollar, unless otherwise directed. 1. Calculate the activity rate for (a) setting up equipment and (b) other overhead. a. Setting up equipment per setup hour b. Other overhead per oven hour 2. How much total overhead is assigned to Fudge using ABC? $ 3. What is the unit overhead assigned to Fudge using ABC? Round to the nearest cent. per unit 4. Now, ignoring the ABC results, calculate the plantwide overhead rate, based on oven hours. Round to the nearest cent. per oven hour 5. How much total overhead is assigned to Fudge using the plantwide overhead rate? 6a. The difference in the total overhead assigned to Fudge is different under the ABC system and non-ABC system because 6b. What is the difference in total overhead assigned to fudge under the two methods? e difference in the total overhead assigned to Fudge is different under the ABC sy becaust v different treatment of setup costs. What is th ds? difference in the units produced. difference in the sale prices of the products. different oven temperatures required for baking fudge and cookies. My Work 3 more Check My Work uses remaining

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

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

Applying IFRS Standards

Authors: Ruth Picker, Kerry Clark, John Dunn, David Kolitz, Gilad Livne, Jance Loftus, Leo Van Der Tas

4th Edition

1119159229, 9781119159223

More Books

Students also viewed these Accounting questions

Question

2. Speak in a firm but nonthreatening voice.

Answered: 1 week ago

Question

What is the role of communication (Chapter 4) in leadership?

Answered: 1 week ago