Koontz Company manufactures two models of Industrial components- 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): BA Advanced Total Number of units produced and sold 20,000 10,000 30,000 Sales $3,000,000 $2,000,000 $5,000,000 Coat of goods sold 2.300,000 1,350,000 2,650.000 Gross margin 700,000 650,000 1,350,000 Selling and administrative expenses 720,000 480.000 1,200,000 Net operating Income (losa) $ (20,000) $ 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: Assemble Molding and Pack Total Manufacturing overhead conta $ 787,500 5.562,500 $1,350,000 Direct Labor-hours Basic 10,000 20,000 Advanced 30,000 3,000 10.000 Machine-hours: 15,000 Basic 12,000 Advanced 12,000 10,000 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. Koonte'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 four activity cost pools as follows: Activity coat Pool Machining Assemble and pack Order processing Setup AL VLLY Measure Machine-hours in Molding Direct Labor-hours in semble and Pack Number of cotoner order Setup hours Man tacturing Overhead 411.300 202,500 310.000 340.000 $1,350,000 Chesler Harmaths the Adriat 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 four activity cost pools as follows: Activity Cont Pool Machining Assemble and pack Order processing Setups Activity Here Machine-hours in Molding Direct Labor-Hours in semble and Pack Number of customer ordern Setup hours MANUEuring Overhead $ 417,500 282,500 310,000 340,000 $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. 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 Baste model and the Advanced model using the activity based approach. 4. The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertising expenses include $150,000 for the Basic model and $200,000 for the Advanced model. The remainder of the company's selling and Using your activity based cost assignments from requirement 3, prepare a contribution format segmented Income statement that is adopted from Exhibit 7-8. (Hint: Organize all of the company's costs into three categories: variable expenses, traceable flwed 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 14 Reg 18 Req2A Reg 28 Reg 20 Reg 3 Reg 38 Reg 4 Reg 5 Calculate the plantwide overhead rate. Planwide voedrale per DLH Reg 10 >