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The number of parts is now a feasible allocation base because Zeke recently installed a plantwide computer system. Zeke produces two wheel models: Standard and
The number of parts is now a feasible allocation base because Zeke recently installed a plantwide computer system. Zeke produces two wheel models: Standard and Deluxe. Budgeted data for the upcoming year are as follows: i Data Table Standard Deluxe Parts per wheel......................... 6.0 8.0 Setups per 1,000 wheels. ............... 20.0 20.0 Finishing, direct labor hours per wheel..... 1.0 3.0 Total direct labor. hours per wheel ....... 2.6 3.4 The company's managers expect to produce 1,000 units of each model during the year. 1. Compute the total budgeted manufacturing overhead cost for the upcoming year. 2. Compute the manufacturing overhead cost per wheel of each model using ABC. 3. Compute the company's traditional plantwide overhead rate. Use this rate to determine the manufacturing overhead cost per wheel under the traditional system. For the upcoming year, Zeke's budgeted ABC manufacturing overhead allocation rates are as follows: Data Table It Cost Activity Cost Activity Allocation Base Allocation Rate Materials handling. . . . . Number of parts $ 5.50 per part Machine setup........ Number of setups $ 325.00 per setup Insertion of parts. . . . . . Number of parts $ 24.00 per part Finishing ............ Finishing direct labor hours $ 57,00 per hour the nex
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