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please help will like Ch17 Case Study Assignment - Part 3 Currently Kingdom Industries is considering changing to an Activity Based Costing System due to
please help will like
Ch17 Case Study Assignment - Part 3 Currently Kingdom Industries is considering changing to an Activity Based Costing System due to increased sales, increased number of products, and a more complex manufacturing process with many activities Kingdom Industries has the following overhead costs and cost drivers Compute the overhead rate for each cost poolt Dal Activity Cost Pools Cost Driver Overhead Rate (a/b) Ordering and Receiving Machine Setup Machining Assembly Inspection Orders Setups Machine hours Parts Inspections Est. Overhead al $56.250 $50,000 $600,000 $450,000 $1,280,000 Cost Driver Activity (6) 2.250 orders 10,000 setups 50,000 MH 600,000 parts 40,000 Inspections Traditional Cost Pool Direct Labor Hours $2,436,250 1.000 DL Hours Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection Traditional Cost Pool Product A Activity 1,500 Orders 7,500 Setups 35,000 Machine hours 450,000 Parts 28,000 Inspections Product B Activity 500 Orders 2,000 Setups 9,000 Machine hours 100,000 Parts 7,000 inspections Product Activity 250 Orders 500 Setups 6,000 Machine hours 50,000 Parts 5,000 Inspections -- 575 DL Hours 275 DL Hours 150 DL Hours Compute the total overhead costs assigned to Product Cusing activity based costing Machine Setup 7,500 Setups 35,000 Machine hours Machining Assembly Inspection 2,000 Setups 9,000 Machine hours 100,000 Parts 7,000 Inspections 500 Setups 6,000 Machine hours 50,000 Parts 5,000 Inspections 450,000 Parts 28,000 Inspections Traditional Cost Pool 575 DL Hours 275 DL Hours 150 DL Hours Total Overhead Costs (a xb) Compute the total overhead costs assigned to Product C using activity based costing: Activity Based Costing Product C Activity Overhead Rate (a) (b) Ordering and Receiving Machine Setup Machining Assembly Inspection Using ABC costing, Total Overhead Costs assigned to Product C Compute the total overhead costs assigned to Product Cusing traditional costing: Traditional Costing Total Overhead Costs Product C Activity (a) Overhead Rate (b) (axb) Traditional Cost Pool Compute and compare overhead: Current Traditional OH Product COH Costs Proposed ABC OH Increase/Decrease 2. Instructions for Posting (200 to 300 words - 60pts): a. Based on the results for Product B Overhead for Traditional Costing and the proposed ABC Costing: 1-Would you recommend to change from Traditional Costing to ABC Costing for computing overhead? 2-Provide three reasons (explain advantages or disadvantages) for your decision. b. Explain Activity Based Costing and describe three activities for ABC costing. Include one advantage and one limitation in using ABC Costing in comparison to Traditional Costing. c. Explain and compare Unit Level Activities to Product Level Activities. Provide two examples for Unit Level Activities and two examples for Product Level Activities. * Upload and attach your completed excel file to your posting. 3. Instructions for Reply to another student (100 to 200 words - 40pts): a. Choose a student to reply to that completed a different part than you did for your posting. * Please remember: A limit of two students allowed to reply to another student's posting. b. Review the other student's activity based costing problem and posting to explain: 1- If you would compute different answers for any of the other student's overhead costs. 2- Would you recommend for the company in the other student's posting to change from a Traditional Costing system to an Activity Based Costing system? Provide two to three reasons. 3- Meaningful details of what you learned about the accounting concepts and examples from reviewing the other student's posting. *Alternate b.2-: Explain the advantage of enhanced cost control. Decribe and provide two examples for both Value-added activities and Non-value added activities Step by Step Solution
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