Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

I dont know what the formula to find the plant wide MOH rate for both models in the document uploaded. Can a tutor help guide

I dont know what the formula to find the plant wide MOH rate for both models in the document uploaded. Can a tutor help guide me in the right direction?

image text in transcribed Units produced & sold per year Sales Revenue Prime Cost # of Direct Labor Hours # of Machine hours # of Set Ups # of Inspection runs # of packing orders $ $ Product Data Model A Model B 20,000 200,000 600,000.00 $ 6,000,000.00 100,000.00 $ 1,000,000.00 140,000 300,000 20,000 180,000 40 160 600 1,400 9,000 81,000 Manufacturing Overhead Costs: Machining $ 160,000.00 Setup costs $ 180,000.00 Inspection costs $ 140,000.00 Packing Costs $ 180,000.00 Total $ 660,000.00 Simple Cost Allocation Plant-wide MOH Rate Model A Model B Model A Model B Allocated MOH Direct Materials & Direct Labor Allocated MOH Total Product Costs Product Cost (CGS) per unit Selling Price per unit CGS per unit Gross Profit per Unit Activity-Based Costing Activity Rates Machining Setup costs Inspection costs Packing Costs Allocated MOH Direct Materials & Direct Labor Allocated MOH Total Product Costs Product Cost (CGS) per unit Selling Price per unit CGS per unit Gross Profit per Unit Departmental MOH Rates: Model A Model B $ 2.75 Department 1 Fabrication Machine Hours 55,000 145,000 Departmental OH Allocation Direct Materials & Direct Labor Allocated MOH Dept 1 Allocated MOH Dept 2 Total Product Costs $ 1.25 Department 2 Assembly Direct Labor Hours 110,000 330,000 Model A Model B Product Cost (CGS) per unit Selling Price per unit CGS per unit Gross Profit per Unit Compare the results for the simple cost allocation system (plant-wide) with that of an ABC system. Plant wide Departmental Activity Based Model A Selling Price per unit CGS per unit Gross Profit per Unit Model B Selling Price per unit CGS per unit Gross Profit per Unit Which do you think is more accurate and why? What circumstances would favor Ramsey adopting ABC as their allocation method? e) with that of ation method

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Edexcel AS And A Level Mathematics Pure Mathematics Year 1/AS

Authors: Greg Attwood

1st Edition

9781292183398

Students also viewed these Accounting questions