Mastery Problem: Activity Based Costing WoolCorp WoolCorp buys sheep's wool from farmers. The company began operations in January of this year, and is making decisions on product offerings, pricing and vendors. The company is a mining method of signing overhead to products. You've just been hired as a production manager at WoolCorp. Currently Woolcorp makes two products: (1) ww, clean wool to be used as stuffing or insulation and (2) wool yarn for use in the textile Industry The company would like you to evaluate its costing methods for its raw wool and woolyam. Single Plantwide Rate WoolCorp is currently using the single plantwide factory overhead teethod, which uses a predetermined overhead rate based on an estimated allocation sech an desabor hours or machine hours. The rate is computed as follows: Single Plantwide Factory Overhead Rate = (Tots Budgeted Factory Overhead) * {Total Budgeted Plantwide Allocation Base WoolCore has been using combing machine hours as its location base The company would like to consider activity-based costing. In order to understand their current systern better. You evaluate WeiCorps current method of costing for any The production staff has compiled the following information for you on the production of 500 pounds of the raw wool or wool yarn Budgeted Factory Factory Overhead Type Overhead Sorting 525.600 Cleaning 38,400 Combing 1.400 Raw Wool Wool Yarn Hours of combing machine use required B0 20 In the following table, use combing machine hours as the allocation bare for signing overhead costs to each product. When required, round your answers to the nearest der Single Plantwide Factory Overhead Rate 654 per combing hour Raw Wool Wool Yarn Allocated factory overhead cost 52,390 13,000 Activity-Based Costing In order to compare WoolCorp's current method with activity-based costing, you interview the production start and come the following information, which relates to the catwa Type of Cost Activity Base Total Cost Sorting Hours of sorting $25,600 Cleaning Units of cleaning machine power 35.400 Combing Hours of combing machine se 1,400 Hours of sorting required Units of cleaning machine power required Hours of combing machine se required Raw Wool Wool Yam 1,000 4,000 1,920 4,480 00 20 In the following table, compute and enter the activity for each of the thread. If required, round your answers to the nearest cent Activity Activity Rate Sorting per sorting hour Ceaning per unit of clearing machine power Coming per hour of combing machine ute In the following tabi, tocate the cost of sorting, cleaning and coming based on the rates of activity consumed by each one when requivostround your newest Raw Wool Wool Yarn Sorting.com Clearing cost Combing cost Total cost Final Question After reviewing your work on the Single Planwide Rate and Activity and Costing panals, which of the couting method would you recommend to WooCont wh
