Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces the company's two versions of a special reel used for river fishing. The two models are the M-008, a basic reel, and the M-123, a new and improved version. Cost accountants at company headquarters have prepared costs for the two reels for the most recent period. The plant manager is concerned. The cost report does not coincide with her intuition about the relative costs of the two models. She has asked you to review the cost accounting and help her prepare a response to headquarters. Manufacturing overhead is currently assigned to products based on their direct labor costs. For the most recent month, manufacturing overhead was $281,600. During that time, the company produced 11,600 units of the M-008 and 2,400 units of the M-123. The direct costs of production were as follows. M-008 M-123 Direct materials Direct labor $ 92,800 $ 96,000 92,800 48,000 Total $ 188,800 140,800 Management determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year were as follows. Cost Driver Number of machine-hours Number of production runs Number of inspections Total overhead Costs $110,100 Activity Level M-008 8,000 80,000 91,500 $281,600 10 15 M-123 2,000 30 35 Total 10,000 40 50 Required: a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? b. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product? Required A Required B How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? (Round "Total unit cost" to 2 decimal places.) Total overhead Total unit cost M-008 M-123 Required A Required B How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product? (Round "Total unit cost" to 2 decimal places.) Total overhead Total unit cost M-008 M-123 Cathy, the manager of Cathy's Catering, Inc., uses activity-based costing to compute the costs of her catered parties. Each party is limited to 20 guests and requires 4 people to serve and clean up. Cathy offers two types of partiesan afternoon picnic and an evening formal dinner. The breakdown of the costs follows. Activities (and cost drivers) Advertising (parties) Planning (parties) Afternoon Picnic $ 75 per party $ 58 per party Renting equipment (parties, guests) Obtaining insurance (parties) Serving (parties, servers) Preparing food (guests) Formal Dinner $ 75 per party $ 138 per party $ 48 per party plus $13 per guest $195 per party $ 52 per server per party $ 19 per guest $ 83 per party plus $24 per guest $ 395 per party $ 71 per server per party $ 28 per guest Per party costs do not vary with the number of guests. Required: a. Compute the cost of a 20-guest afternoon picnic. b. Compute the cost of a 20-guest evening formal dinner. c. How much should Cathy charge for each guest for each type of party if she wants to cover her costs? Required A Required B Required C Compute the cost of a 20-guest afternoon picnic. Afternoon picnic Required A Required B Required C Compute the cost of a 20-guest evening formal dinner Evening formal dinner Complete this question by entering your answers in the tabs below. Required A Required B Required C How much should Cathy charge for each guest for each type of party if she wants to cover her costs? (Round your answers to 2 decimal places.) Afternoon picnic Formal dinner Charging Amount per guest per guest Main Street Ice Cream Company uses a plantwide allocation method to allocate overhead based on direct labor-hours at a rate of $2 per labor-hour. Strawberry and vanilla flavors are produced in Department SV. Chocolate is produced in Department C. Sven manages Department SV and Charlene manages Department C. The product costs (per thousand gallons) follow. Direct labor (per 1,000 gallons) Raw materials (per 1,000 gallons) Strawberry Vanilla $755 805 $ 830 505 Chocolate $1,130 605 Required: a. If the number of hours of labor per 1,000 gallons is 56 for strawberry, 66 for vanilla, and 100 for chocolate, compute the total cost of 1,000 gallons of each flavor using plantwide allocation. b. Charlene's department uses older, outdated machines. She believes that her department is being allocated some of the overhead of Department SV, which recently bought state-of-the-art machines. After she requested that overhead costs be broken down by department, the following information was discovered: Overhead Machine-hours Labor-hours Department SV $75,750 25,250 25,250 Department C $14,274 36,500 18,300 Using machine-hours as the department allocation base for Department SV and labor-hours as the department allocation base for Department C, compute the allocation rate for each. c. Compute the cost of 1,000 gallons of each flavor of ice cream using the department allocation rates computed in requirement (b) if the number of machine-hours for 1,000 gallons of each of the three flavors of ice cream are as follows: strawberry, 56; vanilla, 66; and chocolate, 155. Direct labor-hours by product remain the same as in requirement (a). Required A Required B Required C If the number of hours of labor per 1,000 gallons is 56 for strawberry, 66 for vanilla, and 100 for chocolate, compute the total cost of 1,000 gallons of each flavor using plantwide allocation. Strawberry Vanilla Chocolate Total Cost Required A Required B Required C Using machine-hours as the department allocation base for Department SV and labor-hours as the department allocation base for Department C, compute the allocation rate for each. (Round your answers to 2 decimal places.) Department SV Department C Allocation Rate per machine hour per labor hour Required A Required B Required C Compute the cost of 1,000 gallons of each flavor of ice cream using the department allocation rates computed in requirement (b) if the number of machine-hours for 1,000 gallons of each of the three flavors of ice cream are as follows: strawberry, 56; vanilla, 66; and chocolate, 155. Direct labor-hours by product remain the same as in requirement (a). Total Cost Strawberry Vanilla Chocolate