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Roadster Company (RC) designs and produces automotive parts. In 2017, actual variable manufacturing overhead is $280,000. RC's simple costing system allocates variable manufacturing overhead to
Roadster Company (RC) designs and produces automotive parts. In 2017, actual variable manufacturing overhead is $280,000. RC's simple costing system allocates variable manufacturing overhead to its three customers based on machine-hours and prices its contracts based on full costs. One of its customers has regularly complained of being charged noncompetitive prices, so RC's controller Matthew Draper realizes that it is time to examine the consumption of overhead resources more closely. He knows that there are three main departments that consume overhead resources: design, production, and engineering. Interviews with the department personnel and examination of time records yield the following detailed information Data Table g system that uses Usage of Cost Drivers by Customer Contract nufacturing overhead rate Manufacturing Southern Caesar Juniper ate Department Cost Driver Overhead in 2017 MotorsMotors Design CAD-design-hours $ Engineering Engineering-hours Production Machine-hours Total Auto 35,000 25,000 220,000 280,000 150 130 300 250 100 3,700 100 ine hour 270 earest whole dollar) 1,000
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