NEED HELP ASAP 3 parts
California Circuits Company (3C) manufactures a variefy of components. Its Valey plant specializes in two clectronic components used in circuit bosrds. These components serve the same function and perform equally welt. The difference in the two products is the raw material. The XL-D chip is the oldet of the two components and is made with a metal that requires a wash prior to assembly, Originally, the plant released the wastewater directly into a local river. Several years ago, the compary was ordered to treat the wastewater before its release, and it installed relatively expenswe equigment. While the equipment is fubly depreciatcd; annual operating expenses of $258,000 are still incured for wastewater treatment. Two years ago, company scientsts developed an alloy with all of the properties of the raw materiab used in XL - D thet generates no wastewater, Some prototype components using the new malerial were produced and tested and found to be indistinguishable from the old components in every way relating to their fitness for use. The only cifference is that the new alloy is more expersive than the: old raw material The company has been test marketing the newer wersion of the component, referfed to as XL - C, and is currently irying to decide its fate. Manufacturing of both components begins in the Froduction Department and is completed in the Assembly Department, No other products are produced in the plant. The following information relates to the two componerts: Annual owerhead costs tor the two departments follow: The company peesident believes that irs foolish to continis producing two essentially ecuivalent products. At the same time, the carporate inage is some what tarnahed because of a toxic dump found at another sife (not the Valley plont). The president would like Annual overnead costs tor the two gepartments lour The compary president believes that irs foolish to continue producing two essentially equivalent preducts. At the same time, the corporate irnage is somewnat tarnished because of a toxic dump found at another site (not the Valley plant). The president would like to bet able to point to the Valley piant as an example of compary resesech and development (RBD) working to ptovide an environmentally friendly product. The controller points out to the president that the compamy's financial position is shaky, and it cannot afford to make products in any way other than the most cost-efficient one. Requlred: a. 3 CSs current cost accounting system charges owerbead to products based on direct labor cost using a single plantwide rate, What product costs will it report for the two products if the current allocation systein is used? b. The controller tecently completed an executive education course describing the two-stage atlocation procedure, Assume that the first stape allocotes costs to departments-and the tecond stape allocates costs to products. The controller believes that the costs vill be more aceurate if machine hours are used to allocate Production Departnent costs and labor-hours are used to allocate Asserntaly Department costs; What product costs will be roporfed for the two products if the two-stage alocation process is used? d. The president argues that an activity bused costing system would provide even better costs. The company decides to compiste product eosts assuming an ABC system is implemented only in the Production Department Overheod in Assembly wil continue to be allocated based on diect labor cost. The cost drivers selected for the activity-based costing system are as follows: Whyt product conts would be reported if this ABC system were implemented? Assume that the production mix and costs would femain as originally planned: Complete this question by entering your answers in the tabs below. 3C's current cost accounting system charges overhead to products based on direct labor cost using a single plantwide rate. What product costs will it report for the two products if the current allocation system is used? Note: Round "Overhead percentage" to the nearest whole percent and other intermediate calculations and final answer to 2 decimal pleces. The controller recently, completed an executive education course describing the two-stage allocation procedure. Assume that the first stage allocates costs to departments and the second stage allocates costs to products. The controller believes that the costs wil be more accurate if machine-hours are used to allocate Production Department costs and labor-hours are used to allocate Assembly Department costs. What product costs will be reported for the two products if the two-stage allocation process is used? Note: Round your intermediate calculations and final answer to 2 decimal places. What product costs would be reported if this ABC system were implemented? Assume that the production mix and costs would remain as originally planned. Note: Round your intermediate calculations and final answer to 2 decimal places
