Empire Company manufactures wheel rims. The controller budgeted ABC allocation rates for $2024.$ Empire produces two wheel rim models: standard and deluxe. Budgeted data for $2024$ are as follows

$($Click the icon to view the $2024$ allocation rates and budgeted data $)$

$($Click the icon to view additional information, budgeted information and the deluxe unit cost calculation $)$

Controller Michael Bender is surprised by the increase in cost of the deluxe modelunder ABC. He had a market research conducted.

$($Click the icon to view the results of the market research.$)$

Would implementing the value engineering recommendation enable Empire to achieve its target cost for the deluxe rim?

Begin by selecting the formula to allocale overhead $(OH)$ costs Then enter the amounts to calculate the revised finishing activity cost per rim

$$ Allocated mig overhead costs

Data table

$\backslash$table$[[$Activity$,$Allocation Base,$\backslash$table$[[$Predetermined Overhead$],[$Allocation Rate$]]],[$Materials handling,Number of parts,$$2\mathrm{.}00$ per part$],[$Machine setup,Number of setups,$200\mathrm{.}00$ per setup$],[$Insertion of parts,Number of parts,$26\mathrm{.}00$ per part$],[$Finishing$,$Number of finishing hours,$60\mathrm{.}00$ per hour$]]$

$\backslash$table$[[,$Standard,Deluxe$],[$Parts per rim,$7\mathrm{.}0,8\mathrm{.}0],[$Setups per $500$ rims,$15\mathrm{.}0,15\mathrm{.}0],[$Finishing hours per rim,$20,6\mathrm{.}5],[$Total direct labor hours per rim,$7\mathrm{.}0,8\mathrm{.}0]]$

Dant table

In $2025,$ Empire's managers used the same indirect manulacturing costs per wheel rim that they computed in $2024$ using activity$-$based costing. In addition to the unit indirect manufacturing costs, the following data are expected for the company's standard and deluxe models for $2024$