Coronado Manufacturne proches two products inits Saratoga plant, bakzene and gahrene. Since opened its doors in 1965. Coronado has been using a single manufacturing owerhead posito accumulate verhead costs. Chextead has been allocated to products based on direct labor hours Until recently. Coronado was the sole producer of galvene in the country and was therefore able to dictate the selling price. However, last year Marcella Products began marketing a comparable product at $56 per unit a price that is below Coronado's product cost. Coronado's market share of galvene has declined rapidly as a result. The company's managers must now decide whether to meet the competitive price or discontinue the product. Coronados cost accountant has suggested that the company do an activity based cost analysis before managers make the decision The two main indirect costs of manufacturing balzene and galvene are power usage and setup costs. Most of the power usage occurs in the fabricating department, most of the setup costs are incurred in the assembly department. Setup costs are incurred predominantly in the production of batzene. The fabricating department has identified machine hours as the appropriate cost driver; the assembly department has identified setups as the appropriate cost driver. Direct labor rates are the same in both departments The combined budget for manufacturing is as follows. Total $1080,000 Balzene 10.000 Thours per unit $1200 per unit Galvene 10.000 Zhours per unit $2 peront Number of units Direct labor Direct material Overhead Indirect labor Fringe benefits Indirect materials Power 550.000 18.000 31,000 180.000 90.000 25,000 20.000 30.000 Quality assurance Other utilities Depreciation The cost accountant has prepared the following estimates overhead usage by the two departments Indirect labor Fringe benefits Indirect materials Power Setup Outy assurance Other utilities Depreciation Fabricating 75% 704 $20.000 $100.650 $20.000 65 800 BE Assembly 2551 3 $11.000 $79.350 $70.000 S5% SON 20N Alvity Base Mathe Hours Setups 009 350 CHI Activity Base Usage Balzene Galvene Machine Hours 4 MH/unit 6 MH/unit Setups 1.000 250 lal Your answer is correct Calculate the unit costs of batzene and galvene using the current overhead allocation basis of direct labor hours. Round overhemd rute and feel ansurers to 2 decimal places, s. 15.25.) Balzene Galvene Cost per unit $ 5 e Textbook and Media Attempts, unlimited Calculate the amount of overhead cost assigned to the Fabricating and Assembly activity cost poots using the cost accountant's estimates Determine the overhead rate for each cost peal. Round overhed rate answers to 3 decimal places, e s. 15.215.3 Fabricating Assembly Overhead cost assigned $ 5 Overhead rate MH S setup e Textbook and Media 5 for Later Attempts: unlimited Submit
