EXERCISE 3 Smithville Company is analyzing the production of 2 motors for lawnmowers, model LM127 and model TB200. The expected production is 13,000 models LM127 and 15,000 models TB200. Model LM127 expected selling price is $750 and model TB200 expecting selling price is $1,000. The activities with the corresponding driver identified are: ACTIVITY DRIVER Designs modifications Change requests Cutting parts Machine Hours Quality Control Number of batches Assembly components Direct Labor Hours Cleaning workhouse Square feet of floors Providing electricity Kilowatt hours Calibrating machines Number of batches Overhead Costs are: Activity Overhead Costs Designs modifications 3,000,000 1,700,000 1,100,000 2,700,000 Cutting parts Quality Control Assembly components Cleaning workhouse Providing electricity Calibrating machines 800,000 840,000 $2,000,000 Activity Levels Activity Motor LM127 Motor TB200 Change requests 10 15 Machine Hours 2,000 3,000 Number of batches 150 250 Direct Labor Hours 1,200 1,800 Square feet of floors 900 1600 Kilowatt hours 5,000 7,000 Number of batches 150 250 The Quality Control and Calibrating machines activities will be part of a pool called Motor Setting, the other activities are individual pools. Direct Costs for each model are: Cost per unit |LM127 TB200 Direct Materials $150.00 $172.00 Direct Labor $120.00 $138.00 Variable Overhead $ 45.00 $ 52.00 REQUIRED: Establish Overhead rate for each activity pool (6 points) Using ABC, How much total overhead should be assigned to LM127? (3 points) Using ABC, How much total overhead should be assigned to TB200? (3 points) Using ABC, How much will be the total budgeted cost of LM127? (3 points) Using ABC, How much will be the total budgeted cost of TB200? (3 points) If Smithville decides to use plantwide method based on machine hours: How much will be the total budgeted cost of LM127? (3 points) How much will be the total budgeted cost of TB200? (3 points) What will be the expected profit of LM127 using ABC? (3 points) What will be the expected profit of TB200 using ABC? (3 points) What will be the expected profit of LM127 using plantwide? (3 points) What will be the expected profit of TB200 using plantwide? (3 points)