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PLEASE HELP Pat Miranda, the new controller of Vault Hard Drives, Inc., has just returned from a seminar on the choice of the activity level
PLEASE HELP
Pat Miranda, the new controller of Vault Hard Drives, Inc., has just returned from a seminar on the choice of the activity level in the predetermined overhead rate. Even though the subject did not sound exciting at first, she found that there were some important ideas presented that should get a hearing at her company. After returning from the seminar, she arranged a meeting with the production manager, J. Stevens, and the assistant production manager, Marvin Washington. Traditional Approach to Computation of the Predetermined Overhead Rate Estimatedtotalunitsproduced,78,000Estimatedtotalmanufacturingoverheadcost,$1,794,000=$23.00 per unit New Approach to Computation of the Predetermined Overhead Rate Using Capacity in the Denominator Estimated total manufacturing overhead cost at capacity, $1,794,000 Total units at capacity, 100,000 units Required: In all of the questions below, assume that the predetermined overhead rate under the traditional method is $23 per unit, and under the new capacity-based method it is $17.94 per unit 1. Assume actual sales is 71,000 units and the actual production in units, actual selling price, actual variable manufacturing cost per unit, and actual fixed costs all equal their respective budgeted amounts. Given these assumptions: a. Compute net operating income using the traditional income statement format. b. Compute net operating income using the new income statement format. 2. Assume that actual sales is 71,000 units and the actual selling price, actual variable manufacturing cost per unit, and actual fixed costs all equal their respective budgeted amounts. Under the traditional approach, how many units would have to be to realize net operating income of $313,000 ? 3. Assume that actual sales is 71,000 units and the actual selling price, actual variable manufacturing cost per unit, and actual fixed costs all equal their respective budgeted amounts. Under the new capacity-based approach, how many units would have to be produced to realize net operating income of $313,000 ? Complete this question by entering your answers in the tabs below. Compute net operating income using the traditional income statement format. Complete this question by entering your answers in the tabs below. Compute net operating income using the new income statement format. Complete this question by entering your answers in the tabs below. Assume that actual sales is 71,000 units and the actual selling price, actual variable manufacturing cost per unit, and actual fixed costs all equal their respective budgeted amounts. Under the traditional approach, how many units would have to be produced to realize net operating income of $313,000 ? (Do not round your intermediate calculations and round your final answers to the nearest whole dollar number.) is question by entering your answers in the tabs below. Assume that actual sales is 71,000 units and the actual selling price, actual variable manufacturing cost per unit, and actual fixed costs all equal their respective budgeted amounts. Under the new capacity-based approach, how many units would have to be produced to realize net operating income of $313,000 ? (Do not round your intermediate calculations and round your final answers to the nearest whole dollar number.) Pat Miranda, the new controller of Vault Hard Drives, Inc., has just returned from a seminar on the choice of the activity level in the predetermined overhead rate. Even though the subject did not sound exciting at first, she found that there were some important ideas presented that should get a hearing at her company. After returning from the seminar, she arranged a meeting with the production manager, J. Stevens, and the assistant production manager, Marvin Washington. Traditional Approach to Computation of the Predetermined Overhead Rate Estimatedtotalunitsproduced,78,000Estimatedtotalmanufacturingoverheadcost,$1,794,000=$23.00 per unit New Approach to Computation of the Predetermined Overhead Rate Using Capacity in the Denominator Estimated total manufacturing overhead cost at capacity, $1,794,000 Total units at capacity, 100,000 units Required: In all of the questions below, assume that the predetermined overhead rate under the traditional method is $23 per unit, and under the new capacity-based method it is $17.94 per unit 1. Assume actual sales is 71,000 units and the actual production in units, actual selling price, actual variable manufacturing cost per unit, and actual fixed costs all equal their respective budgeted amounts. Given these assumptions: a. Compute net operating income using the traditional income statement format. b. Compute net operating income using the new income statement format. 2. Assume that actual sales is 71,000 units and the actual selling price, actual variable manufacturing cost per unit, and actual fixed costs all equal their respective budgeted amounts. Under the traditional approach, how many units would have to be to realize net operating income of $313,000 ? 3. Assume that actual sales is 71,000 units and the actual selling price, actual variable manufacturing cost per unit, and actual fixed costs all equal their respective budgeted amounts. Under the new capacity-based approach, how many units would have to be produced to realize net operating income of $313,000 ? Complete this question by entering your answers in the tabs below. Compute net operating income using the traditional income statement format. Complete this question by entering your answers in the tabs below. Compute net operating income using the new income statement format. Complete this question by entering your answers in the tabs below. Assume that actual sales is 71,000 units and the actual selling price, actual variable manufacturing cost per unit, and actual fixed costs all equal their respective budgeted amounts. Under the traditional approach, how many units would have to be produced to realize net operating income of $313,000 ? (Do not round your intermediate calculations and round your final answers to the nearest whole dollar number.) is question by entering your answers in the tabs below. Assume that actual sales is 71,000 units and the actual selling price, actual variable manufacturing cost per unit, and actual fixed costs all equal their respective budgeted amounts. Under the new capacity-based approach, how many units would have to be produced to realize net operating income of $313,000 ? (Do not round your intermediate calculations and round your final answers to the nearest whole dollar number.)Step by Step Solution
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