Dont worry about setting it up the way it mentions.
XL-D 100,000 $12 XL-C 25,000 $14 1 2 3 0.1 0.4 $20 0.1 0.4 $20 5 6 Units produced Direct material costs per unit Direct Labor Information Direct labor-hours per unit-Production Direct labor-hours per unit-Assembly Direct labor rate per hour-all labor Other Activity Information Machine-hours per unit-Production Machine-hours per unit-Assembly Testing hours per unit Shipping weight per unit (pounds) Wastewater generated per unit (gallons) 7 1.6 0.4 1.6 0.4 3.0 1.6 0.0 SIM 3.0 10 11 12 10.0 13 14 Project 2 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Annual overhead costs for the two departments follow: Production Department Assembly Department $1,050,000 $500,000 The company president believes that it's foolish to continue producing two essentially equivalent products. At the same time, the corporate image is somewhat tarnished because of a toxic dump found at another site (not the Valley plant). The president would like to be able to point Dag 1A Required: A. 3C's current cost accounting system charges overhead to products based on direct labor cost using a single plantwide rate. What per unit product costs (material, labor, and overhead) will it report for the two products if the current allocation system is used? Use the tab "Requirement A in the Excel template to answer this question. Set up a chart similar to Exhibit 9.7 in the textbook (see page 358) to show your answer (adjust the names of the parts of the chart in the textbook to fit with the details of the project). Do not round intermediate calculations. You must show the work of your calculations, so you must use cell referencing to set up the elements in your chart. 7 B. The controller recently completed an executive education course describing the two-stage allocation procedure. Assume that the first stage allocates costs to departments and the second stage allocates costs to products. The controller believes that the costs will be more accurate if machine-hours are used to allocate Production Department costs and direct labor-hours are used to allocate Assembly Department costs. What per unit product costs will be reported for the two products if the two-stage allocation process is used? Use the tab "Requirement B" in the Excel template to answer this question. Set up a chart similar to Exhibit 9.9 in the textbook (see page 359) to show your answer. Do nodround intermediate calculations. You must show 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 20 C. The company decides to compute product costs assuming they implement an Activity Based Costing (ABC) system. The company first assigns all overhead to one of six cost pools. The overhead cost pools and the cost drivers selected for those cost pools are: Overhead Cost Pool Cost Pool Total Cost Pool Driver Supervision $ 340,000 Direct labor hours Material Handling $ 133,000 Direct material cost Testing $ 150,000 Testing hours Wastewater treatment $ 300,000 Wastewater generated (gal) Equipment depreciation $ 500,000 Machine hours Shipping $ 127,000 Weight (pounds) What would the per unit product cost be reported for each product if this ABC system were implemented? Assume that the production mix and costs would remain as originally planned. Use the tab "Requirement C" in the Excel template to answer this question. Set up a chart similar to Exhibit 9.16 in the textbook (see page 368) to show your answer. Do not round intermediate calculations. You must show the work of your calculations, so you must use cell referencing to set up the elements in your chart. D. Please briefly discuss the advantages and disadvantages of the three cost allocation methods above, including traditional single plantwide rate cost allocation, two-stage departmental allocation, and activity-based costing. What is your suggestion for the president if you were the controller? Write you answer on a Word document that you will submit to the assignment submission on Blackboard. 17 16 19 20 21 22 23 24
