Dhithead Rate Ch17 Case Study Assignment - Part 2 Currently Paradise Industries is considering changing to an Activity Based Costing System due to increased sales, increased number of products, and a more complex manufacturing process with many activities Paradise Industries has the following overhead costs and cost drivers. Compute the overhead rate fer cach cost pool: Activity Cost Pools Cost Driver Est. Overhead Cest Driver Activity b) Ordering and Receiving Orders $15.000 750 orders Machine Setup Setups $216.000 6000 setups Machining Machine hours $2.750.000 250,000 MH Assembly Parts SI 125,000 1.500.000 Inspection Inspections $2,000,000 20,000 inspection Traditional Cost Pool Direct Labor Hours 56,106,000 122.120 DL Hours Activity Costel Product Activity Product B Activity Product Activity Ordering and Receiving 425 Orders 250 Orders 75 Orders Machine Setup 3,000 Setups 2,000 Setup 1.000 Setup Machining 125,000 Machine herus X5.000 Machine hours 40,000 Machine hours Assembly 900,000 Parts 400.000 Parts 200,000 Parts Inspection 13,000 Inspections 5.000 Inspections 2.000 Inspections Traditional Cost Pool 80.500 DL Hours 16.620 DL Hours 25.000 DL. Hours Compute the total verbal costs assigned to product using activity based costing Activity Based Costing Product B Activity Oched Rele Total Overhead Costs fax Ordering and Receiving Machine Setup Machining Assembly Inspection Using ABC costing. Total Overhead Costs assigned to Product B Compute the total verhead costs assigned to Product Busing traditional cesting Traditional Cesting Product Activity Owerhed Rate Total Overhead Cests (al bl Traditional Cost Pool Computer and compare owerhead Current Traditional OH Proposed ABC OH Increas Decrease Product BOH Costs 2. Instructions for Posting (200 to 300 words - Cepts): a. Based on the results for Product B Overhead for Traditional Costing and the proposed ABC Costing 1- Would you recommend to change from Traditional Casting to ABC Casting for computing overhead? 2. Provide three reasons (explain advantages or disadvantages) for your decision b. Explain Activity Based Costing and describe three activities for ABC casting Include two limitations in using ABC Costing in comparison to Traditional Costing 6. Explain and compare Product Level Activities to Facility Level Activities. Provide two examples for Product Level Activities and two examples for Facility Level Activities. Upload and attach your completed excel file to your posting Dhithead Rate Ch17 Case Study Assignment - Part 2 Currently Paradise Industries is considering changing to an Activity Based Costing System due to increased sales, increased number of products, and a more complex manufacturing process with many activities Paradise Industries has the following overhead costs and cost drivers. Compute the overhead rate fer cach cost pool: Activity Cost Pools Cost Driver Est. Overhead Cest Driver Activity b) Ordering and Receiving Orders $15.000 750 orders Machine Setup Setups $216.000 6000 setups Machining Machine hours $2.750.000 250,000 MH Assembly Parts SI 125,000 1.500.000 Inspection Inspections $2,000,000 20,000 inspection Traditional Cost Pool Direct Labor Hours 56,106,000 122.120 DL Hours Activity Costel Product Activity Product B Activity Product Activity Ordering and Receiving 425 Orders 250 Orders 75 Orders Machine Setup 3,000 Setups 2,000 Setup 1.000 Setup Machining 125,000 Machine herus X5.000 Machine hours 40,000 Machine hours Assembly 900,000 Parts 400.000 Parts 200,000 Parts Inspection 13,000 Inspections 5.000 Inspections 2.000 Inspections Traditional Cost Pool 80.500 DL Hours 16.620 DL Hours 25.000 DL. Hours Compute the total verbal costs assigned to product using activity based costing Activity Based Costing Product B Activity Oched Rele Total Overhead Costs fax Ordering and Receiving Machine Setup Machining Assembly Inspection Using ABC costing. Total Overhead Costs assigned to Product B Compute the total verhead costs assigned to Product Busing traditional cesting Traditional Cesting Product Activity Owerhed Rate Total Overhead Cests (al bl Traditional Cost Pool Computer and compare owerhead Current Traditional OH Proposed ABC OH Increas Decrease Product BOH Costs 2. Instructions for Posting (200 to 300 words - Cepts): a. Based on the results for Product B Overhead for Traditional Costing and the proposed ABC Costing 1- Would you recommend to change from Traditional Casting to ABC Casting for computing overhead? 2. Provide three reasons (explain advantages or disadvantages) for your decision b. Explain Activity Based Costing and describe three activities for ABC casting Include two limitations in using ABC Costing in comparison to Traditional Costing 6. Explain and compare Product Level Activities to Facility Level Activities. Provide two examples for Product Level Activities and two examples for Facility Level Activities. Upload and attach your completed excel file to your posting
