Requirement 4. What value, if any, would MFQ get by allocating costs of each department based on the activilos dore in erat depertmern? (Selinct three benefis of the inC syelem.) A. The system will assist in price setting that more accurately reflect the cost of the product. B. Managers can better allocate conts due to identifying cost drivers. c. Managers can allocate overhead costs broadiy in an easy, inexpensivh, and reaschably accurate way. 10. There is no value to alocating costs of each department based on actwies dane in that departrnent costs wil alwsys be lower when usirg the simple costing mothod. Caloulate the overhead allocated to each cuntomec, by departmont, using the department overhead cost rates calculated in the previous ntep. Calculate the total overhoad cost for aach department and each customer. Requirement 3. Do you think Jones had a valid reason for dissatisfaction with the cost and price of its building? How does the allocation based an department rates change cosis for eact project? Under the simple-costing system, was likely unhappy about its bill, because the contract appears to have been If the oew department-based rates are uned to pric contracts, will likely be happiar about its bill. If the new department-based rates are used to price contracts, Caesar and Lowell wirl ikefy be unhappy. This is because their bils under the simple-coating system appear to have been Using the department-based rates, their bills will be higher If the new dopartment based rates are used, MFQ should explain to the unhappy customens how the calculation was done, and point out their high use of relative to engineering and construction hours jobais f unon tha following informaton: FIt (Clock the loon to viene the information) Road the reouiromants. Requirements Data table 1. Compute the overhead alocated to each project in 2020 using the simple costing syatem that alocates overhead costs to jobs based on tha number of jobs. 2. Compute the overhead alocatiod to each project in 2020 using deportment overtead cost rates. 3. De you think Bates had a vald reason for distatisfaction with the cost and price of ths bullding? How does the allocation based on department rates changh cosss tor each project? 4. What value, ir any, woule SRW got by allocasing eosts of each department based on the advilies done in that dopartment? Requirement 1. Compute the overhead allocated to each project in 2020 using the simple costing syatem that allocates overhead costs to jobs based on the number af job Determine the formula need d to calculate overhead using the simple costing method and then calculate the overhead rate for 2020 . (Round your answer to the nearost dol Requirement 2 Compute the overhead allocated to each project in 2020 using department cherhead cost rates. Determine the formula used to calculate the cost driver rates: The 2020 department overhead cost rates by department are as follown
