Home Insert Draw Design Layout Calibri (Bo... 12 References Aa D Paste B I ab x A : Ava 3 5 Page 8 of 11 1978 words English (United States) 101 EMBA 28 CMA END OF TERM EXAM THEORY 11-08-2023 n - Mailings Review View DocuSign PERRLA QuillBot Tell me Share Comments T AaBbCcDdi AaBbCcDdE AaBbCcDdEe Heading 1 Normal No Spacing AaBbCcDdEe Heading 2 > Styles Pane Dictate Editor Pickit Images MathType PAN-ATLANTIC UNIVERSITY SSOCIATION AMBA ACCREDITED AACSB ACCREDITED Question(3) The Savther Company manufactures and sells two products, A and B. Manufacturing overhead costs at its Edmonton plant are allocated to each product using a plantwide rate of $17 per direct manufacturing labour-hour. This rate is based on budgeted manufacturing overhead of $340,000 and 20,000 budgeted direct labour-hours. Budgeted Manufacturing Budgeted Direct Manufacturing Labour-Hours Manufacturing Department Overhead 1 $240,000 10,000 2 Total 100,000 $340,000 10,000 20,000 The number of direct manufacturing labour-hours required to manufacture each product is: Manufacturing Department 1 2 Total Product A 4 1 5 Product B 1 4 5 Per-unit costs for the two categories of direct manufacturing costs are: Direct Manufacturing Costs Product A Direct material costs Direct manufacturing labour costs $120 80 Product B $150 80 At the end of the year there was no work in process. There were two 200 finished units of product A and 600 finished units of product B on hand. Assume that the budgeted production level of the Edmonton plant was exactly attained. Savther sets the listed selling price of each product by adding 120% to its unit manufacturing costs; that is, if the unit manufacturing costs are $100, the listed selling price is $220($100+$120). This 120% markup is designed to cover costs upstream to manufacturing (for example, product design) and costs downstream from manufacturing (for example, marketing and customer service) as well as to provide an operating income. REQUIRED (a) What is the effect on the inventoriable costs for products A and B of using a plantwide overhead rate instead of department overhead rates? (4 marks) (b) What difference would result in the per-unit selling prices of product A and product B from using a plantwide overhead rate instead of department overhead rates? (4 marks) + 91% Focus