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Required Information Chrom Company manufactures two models, the XL and RD. It also has two departments, assembly and finishing. The company wants to assign budgeted
Required Information Chrom Company manufactures two models, the XL and RD. It also has two departments, assembly and finishing. The company wants to assign budgeted overhead costs to its two different models to better understand the profitability of each model. The Tableau Dashboard provides data for our analysis. Budgeted Overhead Costs by Budgeted Direct Labor Hours & Department Machine Hours by Department 150,000 h... 125,000 h... 100,000 h... Finishing 75,000 hrs Assembly Total: $8,000,000 Assembly 50,000 hrs Assembly 25,000 hrs Finishing Direct Labor Hours Finishing Machine Hours Budgeted Overhead Costs by Cost Driver & Budgeted Usage Activity by Activity Supervision Maintenance Supervision Total: $8,000,000 Maintenance Note: Total overhead costs by department and total overhead costs by activity are equal. The costs are presented in two different ways here. * + ableau 4 2. Chrom produced 25,000 units of XL and 25,000 units of RD. Each unit of the XL model used 2 direct labor hours and 1 machine hour. Each unit of the RD model used 3 direct labor hours and 3 machine hours. (a) Compute the overhead cost per unit of each model using ABC. (b) Alternatively, compute the overhead cost per unit of each model using a single plantwide overhead rate based on direct labor hours. 3. The company gives a bonus to production managers based on their ability to lower the cost of their assigned model. a. Which overhead cost allocation method would the XL production manager prefer? b. Which overhead cost allocation method would the RD production manager prefer? Complete this question by entering your answers in the tabs below. Required 2A Required 2B Required 3 Alternatively, compute the overhead cost per unit of each model using a single plantwide overhead rate based on direct labor hours. Plantwide OH Rate OH Cost Per Unit Model XL RD Activity Usage DLH DLH
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