Tackett makes handheld calculators in two models-basic and professional. Tackett estimated $1,053,000 of manufacturing overhead and 585,000 macine hours for the year. The basic model actually consumed 160,000 machine hours, and the professional model consumed 425,000 machine hours. The predetermined overhead allocation rate using machine hours as the allocation base is $1.80 per machine hour, with the allocated overhead costs split between the basic model and the peofessional model by $288,000 and $765,000, respectively (Click the icon to view the data using multiple department allocation rates ) (Cick the lcon to vilew additional data) Read the teouiements Requirement 1. Tackett expects to produce 175,000 basic models and 175.000 professional models. Compute the predetermined overhead allocaion rates using activity-based costing. How much overhead is allocated to the basic model? To the professional model? Begin by selectingthe fo da to calculate the predetemr ned overhead OH alocation rat. Then enter the amounts to compute he allocaton rate for each achit Attre i ton used ay-quan ty Enter the materials handling allocation rate to four decimal places, and the remaining alocation rates to the nearest cent.) Predetermined O alocation rate Materials Handing Machine Setup Insertion of Parts How much overhead is alocated to the basic model? To the professional model? Begin by selecting the fomula to allocate overhead (OH) costs.(Abbreviation used: Oty quantity Allocated mfg overhead costs Compute the total overhead allocated to the basic model, and then compute the total overhead allocated to the professional model. Basic ModelProfessional Model Manufacturing overhead-Materials Handling Manufacturing overhead-Machine setup Manufacturing overhead-Insertion of Parts Total manufacturing overhead cost Requirement 2. Compare the activity-based costing results from Requirement 1 with the company's results using a single plantwide rate and using multiple department rates. What conclusions can you draw? Begin by completing the table below to show the total and per unt overhead alocated to each model under each of the three different allocaion methods. (Round per unit amounts to the nearest cent.) Basic Model Professional Model Total MOH Per Unit Total MOH Per Unit Single plantwide allocation rate[ Multiple department allocation rates Activity-based allocation rates What conckusions can you draw The alocation using expected and the s the most accurate because i consuders the resources used by each modl Management can now se hat model cost less an model cost less than model cost more than expected to produce Basic Model Professional Model Manufacturing overhead-Assembly Manufacturing overhead Packaging Total manufacturing overhead cost 203,250 S 63,000 266,250$ 366,750 420,000 786,750 Tackett wants to further refine its costing system by allocating overhead using activity-based costing. The estimated $1,053,000 of manufacturing overhead has been divided into three primary activities: Materials Handling, Machine Setup, and Insertion of Parts. The following data have been compiled: Materials Handling $42,000 Number of parts Machine Setup $423,000 Number of setups Insertion of Parts $588,000 Number of parts Total $ 1,053,000 Overhead costs Allocation Base Expected usage: Basic Model 32 parts per calculator 64 parts per calculator 40 setups per year 20 setups per year 32 parts per calculator 64 parts per calculator Professional Model
