Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller identified two activities and their budgeted costs: Setting up equipment $720,000 Other overheard $5,400,000 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 Setup hours 12,000 3,000 Oven hours 5,000 35,000 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 48 per setup hour b. Other overhead 135 per oven hour 2. How much total overhead is assigned to Fudge using ABC? 1,251,000 3. What is the unit overhead assigned to Fudge using ABC? Round to the nearest cent. $ 156.38 per unit 4. Now, ignoring the ABC results, calculate the plantwide overhead rate, based on oven hours. Round to the nearest cent. 153 per oven hour 5. How much total overhead is assigned to Fudge using the plantwide overhead rate? $ 76.50 X 6a. The difference in the total overhead assigned to Fudge is different under the ABC system and non-ABC system because different treatment of setup costs. 6b. What is the difference in total overhead assigned to fudge under the two methods? $ 28.50 X Feedback Check My Work 1. Determine the cost per activity by dividing the cost data per activity by the total number of hours per activity. 2. Assign costs using the rates in #1 and the hours per activity. 3. Divide the costs from #2 by the number of Fudge units. 4. Use total costs and oven hours to calculate the plantwide rate. 5. Assign costs using the plantwide rate from #4 and oven hours used by Fudge