Integration Exercise 6 Plantwide and Departmental Overhead Allocation; Activity-Based Costing; Segmented Income Statements [LO 2-1, LO 2-2, LO 2-3, LO 2-4, LO 6-4, LO 6-5, LO 7-1, LO 7-3, LO 7-4) Koontz Company manufactures two models of Industrial components-a Basic model and an Advanced Model. The company considers all of its manufacturing overhead costs to be fixed and it uses plantwide manufacturing overhead cost allocation based on direct labor-hours. Koontz's controller prepared the segmented income statement that is shown below for the most recent year (he allocated selling and administrative expenses to products based on sales dollars): Advanced 10,000 Total 30,000 Number of units produced and sold sales Cout of good old Grous margin Selling and administrative expenses Het operating income (10) Dante 20,000 $3,000,000 2,300,000 700,000 720,000 (20,000) $2,000,000 $5,000,000 1,350,000 3,650,000 650,000 1,350,000 480,000 1,200,000 170,000 $150,000 Direct laborers are paid $20 per hour Direct materials cost $40 per unit for the Basic model and $60 per unit for the Advanced model. Koontz is considering a change from plantwide overhead allocation to a departmental approach. The overhead costs in the company's Molding Department would be allocated based on machine-hours and the overhead costs in its Assemble and Pack Department would be allocated based on direct labor-hours. To enable further analysis, the controller gathered the following information: Molding 5707,500 Assemble And Pack Total $562,500 $1,350,000 Manufacturing overhead costs Direct labor hours Basia Advanced Machine hours Basic Advanced 10,000 5,000 20,000 10,000 30,000 15.000 12,000 10.000 12,000 10,000 Required: 1. Using the plantwide approach a. Calculate the plantwide overhead rate. b. Calculate the amount of overhead that would be assigned to each product 2. Using a departmental approach a. Calculate the departmental overhead rates. b. Calculate the total amount of overhead that would be assigned to each product c. Using your departmental overhead cost allocations, redo the controller's segmented Income statement (continue to allocate selling and administrative expenses based on sales dollars). 3. Koontz's production manager has suggested using activity-based costing Instead of elther the plantwide or departmental approaches. To facilitate the necessary calculations, she assigned the company's total manufacturing overhead cost to live activity cost pools as follows: Activity Cost Pool Machining Assemble and pack Order processing Setup Other (unused capacity) Activity Measure Machine-hours in Molding Direct labor-hours in Ansemble and Pack Mamber of customer orders Setup hours Manufacturing Overhead $ 417,500 202,500 230,000 340,000 10,000 $1,350,000 She also determined that the average order size for the Basic and Advanced models is 400 units and 50 units, respectively. The molding machines require a setup for each order. One setup hour is required for each customer order of the Basic model and three hours are required to setup for an order of the Advanced model The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertising costs include $150,000 for the Basic model and $200,000 for the Advanced model. The remainder of the company's selling and administrative costs are organization-sustaining in nature, Using the additional information provided by the production manager, calculate 2. An activity rate for each activity cost pool b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approach c. The total selling and administrative cost traced to the Basic model and the Advanced model using the activity based approach. 4. Using your activity-based cost assignments from requirement 3. prepare a contribution formalsegmented income statement that is adapted from Exhibit 6-8. (Hint: Organize all of the company's costs into three categories: variable expenses, traceable fixed expenses. and common fixed expenses.) 5. Using your contribution format segmented income statement from requirement 4, calculate the break even point in dollar sales for the Advanced model She also determined that the average order size for the Basic and Advanced models is 400 units and 50 units, respectively. The molding machines require a setup for each order. One setup hour is required for each customer order of the Basic model and the hours are required to setup for an order of the Advanced model. The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertisir costs include $150,000 for the Basic model and $200,000 for the Advanced model. The remainder of the company's selling and administrative costs are organization-sustaining in nature. Using the additional Information provided by the production manager, calculate: a. An activity rate for each activity cost pool b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approac C. The total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based approach. 4. Using your activity-based cost assignments from requirement 3, prepare a contribution format segmented income statement the adapted from Exhibit 6-8. (Hint: Organize all of the company's costs into three categories: variable expenses, traceable fixed expe and common fixed expenses.) 5. Using your contribution format segmented income statement from requirement 4, calculate the break-even point in dollar sales the Advanced model. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 2A Req 20 Reg 2C Reg 3A Reg 38 Reg 3 Reg 4 Reg 5 Calculate the plantwide overhead rate. Plantwide overhead rate per DLH Rag 1B She also determined that the average order size for the Basic and Advanced models is 400 units and 50 units, respectively. The molding machines require a setup for each order. One setup hour is required for each customer order of the Basic model and three hours are required to setup for an order of the Advanced model. The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model, les traceable fixed advertising costs include $150,000 for the Basic model and $200,000 for the Advanced model. The remainder of the company's selling and administrative costs are organization-sustaining in nature. Using the additional information provided by the production manager, calculate: a. An activity rate for each activity cost pool. b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approach. c. The total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based approach 4. Using your activity based cost assignments from requirement 3, prepare a contribution format segmented income statement that is adapted from Exhibit 6-8. (Hint: Organize all of the company's costs into three categories: variable expenses, traceable fixed expenses, and common fixed expenses.) 5. Using your contribution format segmented income statement from requirement 4, calculate the break-even point in dollar soles for the Advanced model Complete this question by entering your answers in the tabs below. RAGA Taeg 10 Red 2A Reg 28 Reg 20 Reg 3A Re4 35 Reg C Reg 4 Regs Calculate the amount of overhead that would be assigned to each product. Basic Advanced Amount of overhead Reg 1A Reg 2 > She also determined that the average order size for the Basic and Advanced models is 400 units and 50 units, respectively. The molding machines require a setup for each order. One setup hour is required for each customer order of the Basic model and three hours are required to setup for an order of the Advanced model. The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertising costs include 5150,000 for the Basic model and $200,000 for the Advanced model. The remainder of the company's selling and administrative costs are organization-sustaining in nature. Using the additional information provided by the production manager, calculate. a. An activity rate for each activity cost pool. b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approach. c. The total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based approach. 4. Using your activity-based cost assignments from requirement 3, prepare a contribution format segmented income statement that is adapted from Exhibit 6-8. (Hint: Organize all of the company's costs into three categories: variable expenses, traceable fixed expenses, and common fixed expenses.) 5. Using your contribution format segmented income statement from requirement 4, calculate the break-even point in dollar sales for the Advanced model Complete this question by entering your answers in the tabs below. Reg 3 Reg4 Reg 5 Regla Req 18 ReapA Reg 28 Reg 2C Reg 3A Reg 38 Calculate the departmental overhead rates. (Round your answers to 2 decimal places) Molding Assemble and Pack Department Department Manufacturing overhead rate Per DLH par MH She also determined that the average order size for the Basic and Advanced models is 400 units and 50 units, respectively. The molding machines require a setup for each order. One setup hour is required for each customer order of the Basic model and three hours are required to setup for an order of the Advanced model. The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertising costs include $150,000 for the Basic model and $200,000 for the Advanced model. The remainder of the company's selling and administrative costs are organization-sustaining in nature. Using the additional information provided by the production manager, calculate: a. An activity rate for each activity cost pool. b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approach c. The total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based approach. 4. Using your activity-based cost assignments from requirement 3, prepare a contribution format segmented income statement that is adapted from Exhibit 6-8. (Hint: Organize all of the company's casts into three categories: variable expenses, traceable fixed expenses. and common fixed expenses.) 5. Using your contribution format segmented income statement from requirement 4, calculate the break-even point in dollar sales for the Advanced model Complete this question by entering your answers in the tabs below. Rog 1A Reg 16 Reg 2A Rets Reg 20 Req Reg 38 Reg 3 Req 4 Red Calculate the total amount of overhead that would be assigned to each product. (Round your intermediate calculations to 2 decimal places.) Basic Advanced Molding Department Assemble and Pack Department Total manufacturing overhead assigned She also determined that the average order size for the Basic and Advanced models is 400 units and 50 units, respectively. The molding machines require a setup for each order. One setup hour is required for each customer order of the Basic model and three hours are required to setup for an order of the Advanced model. The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertising costs include $150,000 for the Basic model and $200,000 for the Advanced model. The remainder of the company's selling and administrative costs are organization-sustaining in nature. Using the additional Information provided by the production manager, calculate: 2. An activity rate for each activity cost pool b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approach c. The total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based approach 4. Using your activity-based cost assignments from requirement 3, prepare a contribution format segmented income statement that is adapted from Exhibit 6-8. (Hint: Organize all of the company's costs into three categories: variable expenses, traceable fixed expenses. and common fixed expenses.) 5. Using your contribution format segmented income statement from requirement 4, calculate the break-even point in dollar simos for the Advanced model Complete this question by entering your answers in the tabs below. RIA Reg 18 Reg 2 Reg 28 Reg 2c Reg 3 Reg 38 Reg 3 Reg4 Reg 5 Using your departmental overhead cost allocations, redo the controller's segmented income statement continue to allocate selling and administrative expenses based on sales dollars). (Round your intermediate calculations to 2 decimal places) Basic Advanced Sales Cost of goods sold Gross margin Selling and administrative expenses Not operating Income She also determined that the average order size for the Basic and Advanced models is 400 units and 50 units, respectively. The molding machines require a setup for each order. One setup hour is required for each customer order of the Basic model and three hours are required to setup for an order of the Advanced model. The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertising costs include $150,000 for the Basic model and $200,000 for the Advanced model. The remainder of the company's selling and administrative costs are organization-sustaining in nature. Using the additional Information provided by the production manager, calculate: a. An activity rate for each activity cost pool. b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approach c. The total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based approach. 4. Using your activity-based cost assignments from requirement 3, prepare a contribution format segmented income statement that is adapted from Exhibit 6-8. (Hint: Organize all of the company's costs into three categories: variable expenses, traceable fixed expenses, and common fed expenses.) 5. Using your contribution format segmented income statement from requirement 4, calculate the break-even point in dollar sales for the Advanced model. Complete this question by entering your answers in the tabs below. Reg 4 Reg 5 Regia Reg 18 REQ ZA Req 28 Reg 20 Rua 3A Reg 30 Req3C Calculate an activity rate for each activity cost pool. (Round your answers to 2 decimal places) Activity Cost Pool Activity Rate Machining por MH Ansamble and pack per DLH Order processing Setups per hour per order Reg 20 Req38 She also determined that the average order size for the Basic and Advanced models is 400 units and 50 units, respectively. The molding machines require a setup for each order. One setup hour is required for each customer order of the Basic model and three hours are required to setup for an order of the Advanced model. The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertising costs include $150,000 for the Basic model and $200,000 for the Advanced model. The remainder of the company's selling and administrative costs are organization-sustaining in nature. Using the additional information provided by the production manager, calculate: a. An activity rate for each activity cost pool b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approach. c. The total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based approach 4. Using your activity-based cost assignments from requirement 3, prepare a contribution format segmented income statement that is adapted from Exhibit 6-8. (Hint: Organize all of the company's costs into three categories: Varlable expenses, traceable fixed expenses, and common fixed expenses.) 5. Using your contribution format segmented income statement from requirement 4, calculate the break-even point in dollar sales for the Advanced model Complete this question by entering your answers in the tabs below. Reg IA Reg 1B Reg 2A Reg 28 Reg 20 Req 3A Reg 38 Requc Reg 4 Reg 5 Calculate the total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity based approach. (Round your intermediate calculations to 2 decimal places.) Basic Advanced Machining Assemble and pack Order processing Setups Total overhead oot assigned She also determined that the average order size for the Basic and Advanced models is 400 units and 50 units, respectively. The molding machines require a setup for each order One setup hour is required for each customer order of the Basic model and three hours are required to setup for an order of the Advanced model. The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertising costs include $150,000 for the Basic model and $200,000 for the Advanced model. The remainder of the company's selling and administrative costs are organization-sustaining in nature, Using the additional Information provided by the production manager, calculate: a. An activity rate for each activity cost pool, b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approach. c. The total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based approach. 4. Using your activity-based cost assignments from requirement 3. prepare a contribution format segmented income statement that is adapted from Exhibit 6-8. (Hint: Organize all of the company's costs into three categories: variable expenses, traceable fixed expenses, and common foed expenses) 5. Using your contribution format segmented Income statement from requirement 4 calculate the break-even point in dollar sales for the Advanced model Complete this question by entering your answers in the tabs below. Rog 1 Reg 16 Reg 2A Reg 28 Req 2c Req 3A Reg 38 Relac Reg 4 Red 5 Calculate the total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based approach. Basic Advanced Total traceabio soling and administrative cost PER MERID Req reg re Me 3 NO 30 REQ G4 Regs Using your activity-based cost assignments from requirement 3, prepare a contribution format segmented Income statement that is adapted from Exhibit 6-8. (Hint: Organize all of the company's costs into three categories: variable expenses, traceable fbxed expenses, and common fixed expenses.) (Round your intermediate calculations to 2 decimal places.) Koontz Company Income statement Total Basic Advanced Variable expenses Total variable expenses Traceable forced expenses Total traceable foed expenses Segment margin Common fixed expenses Total common fixed expenses DIY is erre a Septol TUTT. Une serp HOLID EYE TOT BOLI UUS UT UT UUEDO HUU UHU hours are required to setup for an order of the Advanced model. The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertising costs include $150,000 for the Basic model and $200,000 for the Advanced model. The remainder of the company's selling and administrative costs are organization-sustaining in nature. Using the additional Information provided by the production manager, calculate: a. An activity rate for each activity cost pool. b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approach. c. The total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based approach 4. Using your activity-based cost assignments from requirement 3, prepare a contribution format segmented income statement that is adapted from Exhibit 6-8 (Hint: Organize all of the company's costs into three categories: variable expenses, traceable fixed expenses. and common fixed expenses.) 5. Using your contribution format segmented income statement from requirement 4, calculate the break-even point in dollar sales for the Advanced model. Complete this question by entering your answers in the tabs below. Req1A Reg 13 Reg 2A Reg 28 Reg 20 Red Req 38 Reg 3 Reg 4 Reg 5 Using your contribution format segmented Income statement from requirement 4, calculate the break-even point in dollar sales for the Advanced model. (Round your intermediate calculations to 2 decimal places. Round your final answer to the nearest whole dollar) Breakevin point in dollar