https://www.coursehero.com/u/file/164127169/LF02Assessment2Sem22022pdf/?utm_medium=email&utm_source=braze&utm_campaign=Stu_Engage_UnlockResourceReceipt_Mktg_Email&utm_dispatch=6318212750f58345f0b86740eb33f091

Exhibit 2: Proposed departmental labour and overhead hourly rates Labour rate Overheads Total cost Department per hour per hour per hour Total overheads Casting $21.60 $31.37 $52.97 79,303 Grinding $18.00 $30.14 $48.14 64,500 Machining $25.00 $62.52 $87.52 479,841 Custom work $22.00 $40.48 $62.48 150,262 Assembly $19.00 $21.19 $40.19 325,415 1,099,321 Exhibit 3: Direct labour hour distribution for three division activities Spare parts for Work for V-29 injectors inventory other divisions Hours per batch Hours per Hours per Department of 100 units typical month typical month Casting 21 304 574 Grinding 12 270 540 Machining 58 1115 2158 Custom work 0 C 0 Assembly 35 0 0 Total 126 1,689 3,372 Exhibit 4: Departmental overhead rates based on normal volume Department Normal volume Normal overhead Overhead cost per (Direct labour hours) cost' ($) direct labour hour ($) Casting 2,500 78,800 31.52 Grinding 2,400 69,000 28.75 Machining 8,000 492,000 61.50 Custom work 3,600 147,820 41.06 Assembly 17,500 352,450 20.14 Total / Average 34,000 1,140,070 33.53 Assessment questions (1) Calculate the drive part division's current labour and overhead rates using the existing costing system. (2) Using data in the exhibits, determine the cost of a 100-unit batch of model V-29, a month's spare parts, and a month's work done for other divisions under the present method, and based on your proposal. 1 Estimated overhead cost if each department operates at its normal volume[3] Are the cost differences among the methods signicant? What causes the differences? {4] Assume that producing a batch of 100 of model V29 injectors requires 126 hours, distributed by department as shown in Exhibit 3, and 54,200 worm of materials. M55 Auto Parts sells these injectors at $113 each. Should the company increase the selling price of iii-29? Should iii-29 he dropped from the product line? {Answer using hoth the present method and your rst proposed method}. {5] Assume that M55 Auto Parts also offers a model VSthat is identical to iii29 injectors in all important aspects} including price. but is preferred for some applications because of certain design features Because of the VS's relatively low sales volume, the company buys certain major components for the VBD from outside suppliers rather than making them in-house. The total cost of materials and purchased parts for 100 uniE of model 1itSI'J is 58300; the labour required per 100 unit: is 12, T, 1? and 35 hours respectively in casting, grinding machining. and assembly departments. If a customer ordered 10!] unit: and said that either model V49 or VSD would be acceptable, which model should the company ship? [Answer using only the rst proposed costing method and the assumptions regarding iii-29 from Question 4]. {6] What henefiis, 'rfany, do you see to Miss Auto Parts if e'rdter proposed costing method is adopted? Considerthis question from the standpoint of {a} product pricing to} cost control; it} inventory valuation, [d] charges to outside departments: to] measuring department's perfonhance. What do you think M55 Auto Parts should do regarding their costing procedures? IM+1.6+2+2.5+2.5+E=15 Marks}