Problem 4-25A (Algo) Fairness and cost pool allocations LO 4-1, 4-2, 4-3, 4-5 Fanning Manufacturing Company uses two departments to make its products. Department I is a cutting department that is machine intensive and uses very few employees. Machines cut and form parts and then place the finished parts on a conveyor belt that carries them to Department II, where they are assembled into finished goods. The assembly department is labor intensive and requires many workers to assemble parts into finished goods. The company's manufacturing facility incurs two significant overhead costs: employee fringe benefits and utility costs. The annual costs of fringe benefits are $268,000 and utility costs are $196,000. The typical consumption patterns for the two departments are as follows: The supervisor of each department receives a bonus based on how well the department controls costs. The company's current policy requires using a single allocation base (machine hours or labor hours) to alocate the total overhead cost of $464,000. Required Q. Assume that you are the supervisor of Department L. Choose the aliocation base that would minimize your department's share of the total ovethead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected. b. Assume that you are the supervisor of Department II. Choose the allocation base that would minimize your department's share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected. c. Assume that you are the plant manager and have the authonty to change the company soverhead allocation policy. Formulate an overhead allocaton policy that would be fair to the supervisors of both Departinent I and Deparment in. Comoute the overhead allocations for each department using your policy. Answer is not complete. Complete this question by entering your answers in the tebs below. basin that you selected. bash that you seleded. Node: Do not rount intermediate calculations. Whine lew a Problem 4-25A (Algo) Fairness and cost pool allocations LO 4-1, 4-2, 4-3, 4-5 Fanning Manufacturing Company uses two departments to make its products. Department I is a cutting department that is machine intensive and uses very few employees. Machines cut and form parts and then place the finished parts on a conveyor belt that carties them to Department II, where they are assembled into finished goods. The assembly department is labor intensive and requires many workers to assemble parts into finished goods. The company's manufacturing facility incurs two significant overhead costs: employee fringe benefits and utility costs. The annual costs of fringe benefits are $268,000 and utility costs are $196,000. The typical consumption patterns for the two departments are as follows: The supervisor of each department receives a bonus based on how well the department controls costs. The company's current policy requires using a single allocation base (machine hours or labor hours) to allocate the total overhead cost of $464,000 Required a. Assume that you are the supervisor of Department I. Choose the allocation base that would minimize your department's share of the total ovemead cost. Cakculate the amount of overhead that would be allocated to boln departinents using the base that you selected. b. Assume that you are the supervisor of Department II. Choose the ollocation bose that would minumize your department share of the total overhead cost. Calculate the amount of overhead that would be allocated to both deparments using the base that you selected. c. Assume that you ate the plant manager and have the authority to change the company's oventhead alocation polcy formulate an overhead allocation policy that would be fair to the supervisors of both Department I and Departmen il Compute the overtiead allocations for each department using your policy. Answer is not complete. Complete this question by entering your answers in the tahs below. Compute the overtuead alocations for rach department using your policy tioses to not roosd internediatie calculations. Shene bas's Problem 4-25A (Algo) Fairness and cost pool allocations LO 4-1, 4-2, 4-3, 4-5 Fanning Manufacturing Company uses two departments to make its products. Department f is a cutting department that is machine intensive and uses very few employees. Machines cut and form parts and then place the finished parts on a conveyor belt that carries them to Department II, where they are assembled into finished goods. The assembly department is labor intensive and requires many workers to assemble parts into finished goods. The company's manufacturing facility incurs two significant overhead costs: employee fringe benefits and utility costs. The annual costs of fringe benefits are $268,000 and utility costs are $196,000. The typical consumption patterns for the two departments are as follows: The supervisor of each department recelves a bonus based on how well the department controls costs. The company's current policy requires using a single allocation base (machine hours or labor hours) to allocate the total overhead cost of $464,000. Required 0. Assume that you are the supervisor of Department L. Choose the allocation base that would minimize your department's share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected. b. Assume that you are the supervisor of Department II. Choose the allocation base that would minimize your department's share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected. c. Assume that you are the plant manager and have the authonty to change the company's overhead allocation policy. Formulate an overthead allocation policy that would be fair to the supervisors of both Department I and Department ill Compute the overhead allocations for each department using your policy. Answer is not complete. Complete this question by entering your answers in the tabs below. Assume that you are the supervisor of Department L. Choose the allocalion base that wosid ininimize your department's share of the total overtiead cost. Calculate the amount of overhead that woold be allocated to both departments iaing the base ehat you selected. Nokes Do not round intermediate calculations