The controller has asked you to compareplantwide, department, andactivity-based cost allocation.Acclaim Budgeted Information for the Year Ended November 30, 2020
Forming Department Basic Deluxe Total
Direct materials $37,700 $21,500 $59,200
Direct manufacturing labor 31,200 15,300 46,500
Overhead costs: Set up 7,440
Overhead costs: General overhead 34,410
Assembly Department Basic Deluxe Total
Direct materials $4,800 $15,200 $20,000
Direct manufacturing labor 15,300 14,700 30,000
Overhead costs: General overhead 36,000
Now calculate the budgeted cost of basic and deluxe trophies if Acclaim allocates overhead costs in each department using activity-based costing. l dollar.) Basic Direct materials $ 42,500 Direct manufacturing labor 46,500 Total direct cost 89,000 Allocated overhead: Forming department Setup : General overhead 23,088 Assembly department General overhead 18,360 Total costs E Enter any number in the edit fields and then click Check Answer. Acclaim Inc. makes two styles of trophies, basic and deluxe, and operates at capacity. Acclaim does large custom orders. Acclaim budgets to produce 10,000 basic trophies and 5,000 deluxe trophies. Manufacturing takes place in two production departments: forming and assembly. In the forming department, indirect manufacturing costs are accumulated in two cost pools, setup and general overhead. In the assembly department, all indirect manufacturing costs are accumulated in one general overhead cost pool. The basic trophies are formed in batches of 200 but because of the more intricate detail of the deluxe trophies, they are formed in batches of 50. a (Click the icon to view budgeted information.) Read the muirements. include direct material and direct manufacturing labor cost in your unit cost calculation.) Start by calculating the total direct costs for the basic and deluxe trophies departments. Basic Deluxe Total Direct materials Forming $ 37,700 $ 21,500 $ 59,200 Assembly 4,800 15,200 20,000 Total direct materials 42,500 36,700 79,200 Direct manufacturing labor Forming 31,200 15,300 46,500 Assembly 15,300 14,700 30,000 Total direct manufacturing labor 46'500 30'000 76500 $ 89,000 $ 66,700 $ 155,700 Total direct costs 3. Calculate the budgeted unit cost of basic and deluxe trophies if Acclaim allocates overhead costs in each department using activity-based costing, where setup costs are allocated based on number of batches and general overhead costs for each department are allocated based on direct manufacturing labor costs of each department. 4. Explain briey why plantwide, department, and activity-based costing systems show different costs for the basic and deluxe trophies. Which system would you recommend and why? The controller has asked you to compare plantwide, department, and activity-based cost allocation. Acclaim Budgeted Information for the Year Ended November 30, 2020 Forming Department Basic Deluxe Total Direct materials 37,700 $ 21,500 $ 59,200 Direct manufacturing labor 31,200 15,300 46,500 Overhead costs: Set up 7,440 Overhead costs: General overhead 34,410 Assembly Department Basic Deluxe Total Direct materials 4,800 $ 15,200 $ 20,000 Direct manufacturing labor 15,300 14,700 30,000 Overhead costs: General overhead 36,000
