partial credit,E5-22 (similar to)

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Triton

Inc. makes two styles of trophies, basic and deluxe, and operates at capacity.

Triton

does large custom orders.

Triton

budgets to produce

10,000

basic trophies and

5,000

deluxe trophies. Manufacturing takes place in two production departments: forming and assembly. In the forming department, indirect manufacturing costs are accumulated in two cost pools, set up and general overhead. In the assembly department, all indirect manufacturing costs are accumulated in one general overhead cost pool. The basic trophies are formed in batches of

200

but because of the more intricate detail of the deluxe trophies, they are formed in batches of

50.

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Requirement 1. Calculate the budgeted unit cost of basic and deluxe trophies based on a single plant-wide overhead rate, if total overhead is allocated based on total direct costs. (Don't forget to include direct material and direct manufacturing labor cost in your unit cost calculation.)

Start by calculating the total direct costs for the basic and deluxe trophies departments.

	Basic
Direct materials
Forming	$45,200
Assembly	5,200
Total direct materials	50,400
Direct manufacturing labor
Forming	32,600
Assembly	15,700
Total direct manufacturing labor	48,300
Total direct costs	$98,700

Deluxe

$23,900

2,000

25,900

14,800

21,300

36,100

$62,000

Total

$69,100

7,200

76,300

47,400

37,000

84,400

$160,700

Next, calculate the budgeted overhead rate for total overhead allocated based on total direct costs. First select the formula, then enter the applicable amounts and calculate the rate. (Round your answer to the nearest cent, $X.XX. Abbreviations used: DC = Direct cost, DL = Direct labor, $ = dollar.)

Total overhead costs		Total direct costs	=	Budgeted overhead rate
$32,140		$160,700	=	$0.20	per DC $

Finally, calculate unit cost for the basic and deluxe trophies. (Round your final answer to the nearest cent, $X.XX.)

	Basic	Deluxe	Total
Total direct costs	98,700	62,000
Allocated overhead
Total costs
Unit cost

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Data Table

The controller has asked you to compare plant-wide, department, and activity-based cost allocation.

Triton

Budgeted Information for the Year Ended

November

30,

2017

Forming Department	Basic	Deluxe	Total
Direct materials	$45,200	$23,900	$69,100
Direct manufacturing labor	32,600	14,800	47,400
Overhead costs: Set up			7,110
Overhead costs: General overhead			21,330

Assembly Department	Basic	Deluxe	Total
Direct materials	$5,200	$2,000	$7,200
Direct manufacturing labor	15,700	21,300	37,000
Overhead costs: General overhead			3,700

PrintDone

Calculate the budgeted unit cost of basic and deluxe trophies based on a single plant-wide overhead rate, if total overhead is allocated based on total direct costs. (Don't forget to include direct material and direct manufacturing labor cost in your unit cost calculation.)

2.

Calculate the budgeted unit cost of basic and deluxe trophies based on departmental overhead rates, where forming department overhead costs are allocated based on direct manufacturing labor costs of the forming department and assembly department overhead costs are allocated based on total direct manufacturing labor costs of the assembly department.

3.

Calculate the budgeted unit cost of basic and deluxe trophies if

Triton

allocates overhead costs in each department using activity-based costing, where setup costs are allocated based on number of batches and general overhead costs for each department are allocated based on direct manufacturing labor costs of each department.

4.

Explain briefly why plant-wide, department, and activity-based costing systems show different costs for the basic and deluxe trophies. Which system would you recommend and why?