Completely stumped on this chapter. Please help. Thank you.

ACC2233 Hand-In Assignment 6v2 Problem One PLANT-WIDE RATE AND ACTIVITY-BASED COSTING The comptroller for Douglas Inc. has established the following activity cost pools and cost drivers. Budgeted Overhead Activity Cost Pool Cost Cost Driver Budgeted Level for Cost Driver Machine setups Material handling Waste control Quality control Other overhead costs Number of setups 160 Weight of material 50,000 kilograms Weight of chemicals10,000 kilograms Number of inspections 300 Machine hours 20,000 $200,000 100,000 50,000 75,000 200,000 Each order must be a minimum of 1,000 boxes of film chemicals. The production requirements for each minimum order are as follows: Machine setups Material handling Waste Control Quality Control Other Overhead Costs 5 setups 1,500 kilograms 200 kilograms 5 inspections 500 machine hours Required: 1 Calculate the overhead that should be assigned to each minimum order of film chemicals using the above data. 2 Calculate the overhead that should be assigned to each minimum order of film chemicals if Douglas decides to use a single predetermined overhead rate based on machine hours. Problem Two PLANT-WIDE RATE AND ACTIVITY-BASED COSTING Hood Manufacturing Inc. has four categories of overhead. The expected overhead costs for each of the categories for the next year are as follows: Maintenance Material handling Setups Inspection Costs Cost Driver Expected Activity $510,000 250,000 60,000 21,000 Machine hours Material moves Setups Inspections 60,000 20,000 3,000 12,000 Currently, the company applies overhead using a predetermined overhead rate based upon budgeted direct labour hours of 100,000. The company has been asked to submit a bid on a proposed job. Usually bids are based upon full manufacturing costs plus a percentage of 10 percent. Estimates for the proposed job are as follows: Direct materials Direct labour Number of direct labour hours Number of material moves Number of inspections Number of setups Number of machine hours $30,000 $24,000 8,000 100 120 24 4,000 Required: 1. If the company used activity-based cost drivers to assign overhead, calculate the bid price of the proposed job. 2. If the company used direct labour hours as the cost driver, calculate the bid price of the proposed job. Problem Three NON-VALUE-ADDED COSTS, ACTIVITY COSTS, ACTIVITY COST REDUCTION Bob Daly, vice president of Dwan Company (a producer of a variety of plastic products), has been supervising the implementation of an ABC management system. One of Bob's objectives is to improve process efficiency by improving the activities that define the processes. To illustrate the potential of the new system to the president, Bob has decided to focus on two processes: production and customer service. Within each process, one activity will be selected for improvement: materials usage for production and sustaining engineering for customer service (sustaining engineers are responsible for redesigning products based on customer needs and feedback). Valueadded standards are identified for each activity (the level of efficiency so that no waste exists). For materials usage, the value-added standard calls for six kilograms per unit of output (although the plastic products differ in shape and function, their sizeas measured by weightis uniform). The value-added standard is based on the elimination of all waste due to defective moulds. The standard price of materials is $5 per kilogram. For sustaining engineering, the standard is 58 percent of current practical activity capacity. This standard is based on the fact that about 42 percent of the complaints have to do with design features that could have been avoided or anticipated by the company. Current practical capacity (at the end of 2013) is defined by the following requirements: 6,000 engineering hours for each product group that has been on the market or in development for five years or less and 2,400 hours per product group of more than five years. Four product groups have less than five years' experience, and 10 product groups have more. Each of the 24 engineers is paid a salary of $60,000. Each engineer can provide 2,000 hours of service per year. No other significant costs are incurred for the engineering activity. Actual materials usage for 2014 was 25 percent above the level called for by the Valueadded standard; engineering usage was 46,000 hours. A total of 80,000 units of output were produced. Bob and the operational managers have selected some improvement measures that promise to reduce non-value-added activity usage by 40 percent in 2015. Selected actual results achieved for 2015 are as follows: Units produced 80,000 Materials used 584,800 Engineering hours 35,400 The actual prices paid for materials and engineering hours are identical to the standard or budgeted prices. Required: 1. For 2014, calculate the non-value-added usage and costs for materials usage and sustaining engineering. 2. Using the budgeted improvements, calculate the expected activity usage levels for 2015. Now, calculate the 2015 usage variances (the difference between the expected and actual values), expressed in both physical and financial measures, for materials and engineering. Comment on the company's ability to achieve its targeted reductions. In particular, discuss what measures the company must take to capture any realized reductions in resource usage