Cost Allocation and Performance Evaluation at Kia Motors

Requirements:

1. Develop a cost allocation method for Kia Motors' production facilities to allocate overhead costs to different vehicle models.

Vehicle Model	Direct Costs per Unit ($)	Overhead Costs ($)
Soul	18,000	12,000,000
Sportage	22,000	15,000,000

• Implement an activity-based costing (ABC) system to allocate manufacturing overhead costs to Kia Motors' Soul and Sportage models.
• Evaluate the accuracy of cost allocation methods in measuring the profitability of each vehicle model at Kia Motors.
• Recommend cost allocation improvements to enhance decision-making and performance evaluation at Kia Motors.