Question
Required information Skip to question [The following information applies to the questions displayed below.] Cary Company manufactures two models of industrial componentsa Standard model and
Required information
Skip to question
[The following information applies to the questions displayed below.] Cary Company manufactures two models of industrial componentsa Standard model and an Advanced Model. It has provided the following information with respect to these two products:
Standard | Advanced | |||||
Number of units produced and sold | 20,000 | 10,000 | ||||
Selling price per unit | $ | 150 | $ | 200 | ||
Direct materials per unit | $ | 40 | $ | 60 | ||
Direct labor cost per unit | $ | 30 | $ | 30 | ||
Direct labor-hours per unit | 1.50 | 1.50 | ||||
The company considers all of its manufacturing overhead costs ($1,346,250) to be fixed and it uses plantwide manufacturing overhead cost allocation based on direct labor-hours. Click here to download the Excel template, which you will use to answer the questions that follow.
Click here for a a brief tutorial on Charts in Excel.
3. Within the tab titled Activity Based Approach, go to the section called Product Margin Analysis. Create formulas (within cells B16 through C19) that calculate the amounts of overhead cost that should be allocated from each activity cost pool to each product. Also, create all of the formulas that are needed to compute the product margins for each product and the company as a whole (cells B21 through D21). a. What formulas correctly calculate the cost assignments from the Order Processing and Setups activities to the Advanced model? b. How much overhead cost is assigned from each of the four activities to the Standard and Advanced models? c. What is the product margin for the Standard model? The Advanced model?
4a. Go to the tab titled Activity-Based Cost Analysis. Create formulas in cells B2 through C5 that compute the percent of each activitys total cost that is allocated to each product. (Hint: If you complete this step correctly, the percentages shown in column D will total 100%.) 4b. What percent of each of the four activities is allocated to the Standard model? The Advanced model? 4c. Using Charts, create a 100% stacked bar chart that shows the percent of each activitys total cost that is allocated to each product. (Hint: This chart should refer to the percentages that you computed in cells B2 through C5.) (Your instructor may require you to upload this file in Part 6). Which of the following statements is true with respect to the chart?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started