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Quinnipiac Padfolio Club makes two products (Padfolios and Business Cards) for students to use during interview season. The company has two production departments (Forming and
Quinnipiac Padfolio Club makes two products (Padfolios and Business Cards) for students to use during interview season. The company has two production departments (Forming and Assembly) and operates at capacity. The controller has asked you to compare plant-wide, department, and activity- based cost allocation. Direct Material and Direct Labor is incurred in both production departments (Forming \& Assembly) and is directly traced to the two product lines (Padfolios \& Business Cards). There are also two types of overhead (Setup \& Supervision) incurred in the departments. Overhead costs need to be allocated to the two product lines so the Quinnipiac Padfolio Club can calculate the costs of each product line. Budgeted information for the year ended December 31,2017 is as follows: 4 Other information about the departments' activities follows: Setup costs in each department vary with the number of batches processed in each department. The budgeted number of batches for each product line 5 in each department is as follows: 24 Other information about the departments' activities follows: Setup costs in each department vary with the number of batches processed in each department. The budgeted number of batches for each product line 25 in each department is as follows: \begin{tabular}{r|l|r|r|r|} \hline 26 & \multicolumn{2}{|l|}{} & \\ \hline 27 & Setup Batches & Padfolios & Business Cards & \multicolumn{1}{|c|}{ Total } \\ \hline 28 & Forming Department & 28 & 120 & 148 \\ \hline 29 & Assembly Department & 43 & 90 & 133 \\ \hline \end{tabular} Supervision Costs: Vary with direct manufacturing labor costs in each department. Calculate the budgeted cost of each product line (Padfolios vs. Business Cards) based on departmental overhead rates, where: 2 (a) Forming department overhead costs are allocated based on direct manufacturing labor costs of the forming department, and (b) Assembly department overhead costs are allocated based on total direct costs of the assembly department. Calculate the budgeted cost of each product line (Padfolios vs. Business Cards) if Quinnipiac Padfolio Club allocates overhead costs in each department using activity-based costing. (i.e. Each type of overhead in each department is allocated using the relevant activity in the department.) (Direct costs should be traced to the products as identified above. Indirect costs should be allocated to the products based on four overhead allocation rates - one for each activity.) Quinnipiac Padfolio Club makes two products (Padfolios and Business Cards) for students to use during interview season. The company has two production departments (Forming and Assembly) and operates at capacity. The controller has asked you to compare plant-wide, department, and activity- based cost allocation. Direct Material and Direct Labor is incurred in both production departments (Forming \& Assembly) and is directly traced to the two product lines (Padfolios \& Business Cards). There are also two types of overhead (Setup \& Supervision) incurred in the departments. Overhead costs need to be allocated to the two product lines so the Quinnipiac Padfolio Club can calculate the costs of each product line. Budgeted information for the year ended December 31,2017 is as follows: 4 Other information about the departments' activities follows: Setup costs in each department vary with the number of batches processed in each department. The budgeted number of batches for each product line 5 in each department is as follows: 24 Other information about the departments' activities follows: Setup costs in each department vary with the number of batches processed in each department. The budgeted number of batches for each product line 25 in each department is as follows: \begin{tabular}{r|l|r|r|r|} \hline 26 & \multicolumn{2}{|l|}{} & \\ \hline 27 & Setup Batches & Padfolios & Business Cards & \multicolumn{1}{|c|}{ Total } \\ \hline 28 & Forming Department & 28 & 120 & 148 \\ \hline 29 & Assembly Department & 43 & 90 & 133 \\ \hline \end{tabular} Supervision Costs: Vary with direct manufacturing labor costs in each department. Calculate the budgeted cost of each product line (Padfolios vs. Business Cards) based on departmental overhead rates, where: 2 (a) Forming department overhead costs are allocated based on direct manufacturing labor costs of the forming department, and (b) Assembly department overhead costs are allocated based on total direct costs of the assembly department. Calculate the budgeted cost of each product line (Padfolios vs. Business Cards) if Quinnipiac Padfolio Club allocates overhead costs in each department using activity-based costing. (i.e. Each type of overhead in each department is allocated using the relevant activity in the department.) (Direct costs should be traced to the products as identified above. Indirect costs should be allocated to the products based on four overhead allocation rates - one for each activity.)
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