detailed information:

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Read the requirements.

Data table

Requirement $2.$ Compute the manufacturing overhead allocated to each customer in $2020$ using department$-$based manufac

Determine the formula used to calculate the department$-$based manufacturing overhead rates:

Manufacturing overhead per dept. $,,$ Total hours per dept. $,$ Manufacturing overhead rate by

CP$\text{'}$s $2020$ manufacturing overhead rates by department are as follows:

Manufacturing Overhead Rate

Calculate the overhead allocated to each customer, by department, using the departmental manufacturing overhead rates calc$|$

Requirements

Compute the manufacturing overhead allocated to each customer in $2020$

using the simple costing system that uses machine$-$hours as the allocation

base.

Compute the manufacturing overhead allocated to each customer in $2020$

using department$-$based manufacturing overhead rates.

Comment on your answers in requirements $1$ and $2.$ Which customer do you

think was complaining about being overcharged in the simple system? If the

new department$-$based rates are used to price contracts, which customer$($s$)$

will be unhappy? How would you respond to these concerns?

How else might $CP$ use the information available from

its department$-$by$-$department analysis of manufacturing overhead costs?

CP$\text{'}$s managers are wondering if they should further refine

the department$-$by$-$department costing system into an ABC system by

identifying different activities within each department. Under what conditions

would it not be worthwhile to further refine the department costing system

into an ABC system?