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Tableau DA 17-3: Mini-Case, Computing and assigning costs using ABC LO P3 Chrom Co. manufactures two models, the XL and RD. It also has two
Tableau DA 17-3: Mini-Case, Computing and assigning costs using ABC LO P3 Chrom Co. manufactures two models, the XL and RD. It also has two departments, assembly and finishing. The compan wants to assign overhead costs to its two different models to better understand the profitability of each model. The Tableau Dashboard provides data for our analysis. Estimated Overhead Costs by Estimated Direct Labor Hours & Department Machine Hours by Department 150,000 hrs 125,000 hrs 100,000 hrs Finishing 75,off hrs Assembly 3,000,000 Total: Assembly $8,000,000 50,000 hrs 100,000 70,000 Assembly 25,000 hrs 25,000 Finishing Finishing 30,000 5,000,000 Direct Labor Hours Machine Hours Estimated Overhead Costs by Cost Driver & Expected Usage Activity by Activity Supervision Maintenance Supervision 2,000,000 6,000,000 Total: $8,000,000 Maintenance 125,000 100,000 Note: Total overhead costs by department and total overhead costs by activity are equal. The costs are presented in two different ways here.Tableau DA 4-3: Mini-Case, Computing overhead activity rates using ABC 1. Using activity based costing and data from the lower half of the dashboard, compute overhead activity rates for both maintenance and supervision. Activity cost Budgeted Budgeted pool Cost Activity Usage Activity Rate Maintenance 100,000 MH per MH Supervision 125,000 DLH per DLHTableau DA 4-3: MiniCase, Assigning overhead costs and making decisions 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 ofeach model using ABC. [b] Alternatively. compute the overhead cost per unit of each model using a single piantwide overhead rate based on direct labor hours. 3. The company gives a bonus to production managers based on their ability to lower the cost oftheir 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 Required Required 2A 23 3 Compute the overhead cost per unit of each model using ABC. Maintenance Overhead cost per unit Required 23 > Tableau DA 4-3: Mini-Case, Assigning overhead costs and making decisions 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. [bi 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 oftheir 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 Required Required 2A 2B 3 Alternatively, compute the overhead cost per unit of each model using a single plantwide overhead rate based on direct labor hours
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