Question 1 (30pts in total) Assume that you would like to invest in a company. Required: a) What is your cost object (5pts)? (Do not define cost object, please write down the item or service that you want to produce and sell) b) What is the Direct Material of your product or service (5pts)? c) What are the overhead costs of your product or service (5 pts)? d) Assume that you would like to assign overhead costs to your product or service. Which ld prefer to use for assigning overhead cost to your product or service (In other words, how do you allocate overhead costs to your product or service) (5 pts)? Why (Please explain the reason of your selection) (5 pts)? e) Shall we add "the insurance cost of cars used in marketing department" to the cost of your product or service? If not, Why (5 pts)? Question 2 (Note that you have to show all your calculations) (30 pts in total) X is a manufacturing company and it has both service and production departments as shown in the table below SERVICE DEPARTMENTS PRODUCTION DEPARTMENTS R&M Warehouse Machinery Assembly R&M - 200 services 600 services T 200 services Warehouse 300 services 400 services 300 services FOH ($) 80,000 50,000 100.000 200.000 Required: Please assign service department costs to production departments by using "Algebraic Method" (20pts) b) Assume that total machine hours in the machinery department are 20,000 and total direct labour hours in the assembly department are 10,000. Please calculate overhead application rates for both Machinery and Assembly Departments (5p) c) Assume that Product A requires ten machine hours in the machinery department) and twenty direct labour hours (in the assembly department) to be completed. Please calculate overhead cost to be assigned to Product A. (5p) Question 1 (30pts in total) Assume that you would like to invest in a company. Required: a) What is your cost object (5pts)? (Do not define cost object, please write down the item or service that you want to produce and sell) b) What is the Direct Material of your product or service (5pts)? c) What are the overhead costs of your product or service (5 pts)? d) Assume that you would like to assign overhead costs to your product or service. Which ld prefer to use for assigning overhead cost to your product or service (In other words, how do you allocate overhead costs to your product or service) (5 pts)? Why (Please explain the reason of your selection) (5 pts)? e) Shall we add "the insurance cost of cars used in marketing department" to the cost of your product or service? If not, Why (5 pts)? Question 2 (Note that you have to show all your calculations) (30 pts in total) X is a manufacturing company and it has both service and production departments as shown in the table below SERVICE DEPARTMENTS PRODUCTION DEPARTMENTS R&M Warehouse Machinery Assembly R&M - 200 services 600 services T 200 services Warehouse 300 services 400 services 300 services FOH ($) 80,000 50,000 100.000 200.000 Required: Please assign service department costs to production departments by using "Algebraic Method" (20pts) b) Assume that total machine hours in the machinery department are 20,000 and total direct labour hours in the assembly department are 10,000. Please calculate overhead application rates for both Machinery and Assembly Departments (5p) c) Assume that Product A requires ten machine hours in the machinery department) and twenty direct labour hours (in the assembly department) to be completed. Please calculate overhead cost to be assigned to Product A. (5p)
