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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
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 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: 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? $
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