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Problem 15.051: Calculate indirect cost allocation after determining the rate for each basis CarryALL, Inc., makes and sells small cargo trailers to Individuals and small
Problem 15.051: Calculate indirect cost allocation after determining the rate for each basis CarryALL, Inc., makes and sells small cargo trailers to Individuals and small businesses. Since its opening in 1990. It has allocated Indirect costs (IDC) to its three manufacturing plants based on direct materials cost per unit. Each materials cost per unit. Each plant builds different models and sizes. Because of advances in automation and materials, Judy, the CFO plans to use build-time per unit as the new basis. Build-time is the average number of work-hours to complete a trailer. However, she initially wants to determine what the allocation would have been this year had the build-time basis been used prior to the Incorporation of new technology and materials. The data shown below represents average costs and times. Use this data and the bases Indicated to determine the allocation rates and IDC allocation of $1,180,000 for this year for the three bases. Plant Direct material cost, $ per unit Previous build-time per unit. work-hours New build-time per unit, work-hours New York 20,000 400 425 Virginia Tennessee 12,700 18,600 415 580 355 480 Total 51,300 1395 1260 Fill the allocation rates and IDC allocation in the table. Allocation by each basis, $ Allocation by each basis, $ Allocation by each basis, $ Previous build- time Material cost New build-time VA TN Total
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