Elton

Company manufactures wheel rims. The controller expects the following ABC allocation rates for

2024:

Data table

Activity	Allocation Base	Predetermined Overhead Allocation Rate
Materials handling	Number of parts	$5.00 per part
Machine setup	Number of setups	700.00 per setup
Insertion of parts	Number of parts	25.00 per part
Finishing	Number of finishing hours	50.00 per hour

Elton

produces two wheel rim models: standard and deluxe. Expected data for

2024

Data table

	Standard	Deluxe
Parts per rim	3.0	5.0
Setups per 500 rims	16.0	16.0
Finishing hours per rim	2.0	3.5
Total direct labor hours per rim	3.0	9.0

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Part 1 The company expects to produce 500 units of each model during the year. Read the requirements

Requirements

1.	Compute the total estimated indirect manufacturing cost for 2024.
2.	Prior to 2024, Elton used a single plantwide overhead allocation rate system with direct labor hours as the allocation base. Compute the predetermined overhead allocation rate based on direct labor hours for 2024. Use this rate to determine the estimated indirect manufacturing cost per wheel rim for each model, to the nearest cent.
3.	Compute the estimated ABC indirect manufacturing cost per unit of each model for 2024. Carry each cost per unit to the nearest cent.

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Part 1

Requirement 1. Compute the total estimated indirect manufacturing cost for

2024.

Begin by selecting the formula to compute the total estimated overhead (OH) costs.

					Total estimated
				=	overhead costs