TDABC Bob Randall, cost accounting manager for Hemple Products, was asked to determine the costs of the activities performed within the company's Manufacturing Engineering Department. The department has the following activities: Creating bills of materials (BOMs), studying manufacturing capabilities, improving manufacturing processes, training employees, and designing tools. The resource costs (from the general ledger) and the times to perform one unit of each activity are provided below. Resource Costs Activities Unit Time Driver Salaries Equipment $500,000 100,000 Creating BOMS Designing tools 0.5 hr 5.4 hrs. No. of BOM No. of tool designs Process Improvement 1.0 hr. thes 2.0 hrs No. of training sessions 1.0 hr. Study hrs. Supplies Improving 30,000 processes Total $630,000 Training employees Studying capabilities Total machine and labor hours (at practical capacity): Machine hours 2,000 Engineering hours 18,000 Total hours 20,000 BLOOMIST The activity, designing tools, uses the number of tools designed as the activity driver. Using a traditional approach, the cost of the dese $179,000 (see Exercise 4.19) with an expected activity output of 1,000 for the coming year. During the first week of the year, two job The activity, designing tools, uses the number of tools designed as the activity driver. Using a traditional approach, the cost of the designing tools activity was determined to be $179,000 (see Exercise 4.19) with an expected activity output of 1,000 for the coming year. During the first week of the year, two jobs (Job 150 and Job 151) had a demand for 10 and 20 new tools, respectively. Required: 1. Calculate the capacity cost rate for the Manufacturing Engineering Department. Round your answer to the nearest cent. per hour per BOM 2. Using the capacity cost rate, determine the activity rates for each activity. Round your answers to the nearest cent. Activity Rates Creating BOM Designing tools per tool design Improving processes per process improvement hr. Training employees per training session Studying capabilities per study hour 3. Calculate the cost of designing tools that would be assigned to each job using the TDABC-derived activity rate and then repeat usin Job 150 Job 151 BLOOMIST TDABC ABC 4. Now suppose that time for creating BOMs is 0.50 for a standard product but that creating a BOM for a custom product adds an ad B Bloomist.com MAKE NATURE HOME - Nature Transforms Check My Work All work saved Details 1. Calculate the capacity cost rate for the Manufacturing Engineering Department. Round your answer to the nearest cent. per hour 2. Using the capacity cost rate, determine the activity rates for each activity. Round your answers to the nearest cent Activity Rates Creating BOMS per BOM Designing tools per tool design Improving processes $ per process improvement hr. Training employees s per training session Studying capabilities per study hour 3. Calculate the cost of designing tools that would be assigned to each job using the TDABC derived activity rate and then repeat using the traditional ABC rate Job 150 Job 151 TDABC ABC 4. Now suppose that time for creating BOMs is 0.50 for a standard product but that creating a BOM for a custom product adds an additional 0.3 hour. Express the time equation for this added complexity. Round your answers to two decimal places. Place the amounts left to right, lowest to highest BOM time Calculate the activity rate for the activity of creating a BOM for custom products. Round your answer to the nearest cent. per BOM Previous Check My Work Save and Eur Sun Augen for a All work saved Show at EN S/14 RI o e BD
