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The staff accountant for Sergeant Consulting Group has uncovered the following costs and activities associated with the two products. Part 127 Part 234 Production 500,000

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The staff accountant for Sergeant Consulting Group has uncovered the following costs and activities associated with the two products. Part 127 Part 234 Production 500,000 100,000 Selling Price $31.86 $24.00 Prime costs per unit $9.53 $8.26 Number of production runs 100 200 Receiving orders 400 1,000 Machine hours 125,000 60,000 Direct labor hours 250,000 22,500 Engineering hours 5,000 5,000 Material moves 500 400 Overhead is allocated using a plant-wide rage based on direct labor hours. Overhead Cost Pools Setup costs Material handling costs Machine costs Receiving costs Engineering costs General plant costs Total $240,000 900,000 1,750,000 2,100,000 1,500,000 500,000 $6,990,000 Part 1: Compute overhead and gross margin using traditional costing Per Unit Part 122 Part 234 Overhead/unit $ 880,000 $ 880,000 Gross Margin: Selling Price/unit $ 31.86 $24.00 Prime costs/unit Overhead/unit S S Gross margin/unit $ $ Total Part 127 Part 234 Total Profit $. $ 9.53 $ 8.26 Part 2: Select the best cost driver and compute overhead rates for each cost pool. Cost pool Cost Driver Overhead rate Setup costs Occur with each new production in $240,000.00 Material handling costs Transport material to the machines $ 900,000.00 Machine costs depreciation and maintenance $ 1.750,000.00 Receiving costs Ceca & echipotoning $ 2.100,000.00 Engineering costs plement design changes and son $ 1.500.000,00 General plant costs Althoodanove $ 500,000.00 Part 3: Compute overhead and gross margin using Activity-based Costing Per Unit Part 127 Part 234 Overhead/unit $ Gross Margin: Selling Price/unit $31.86 24.00 Prime costs/unit $ $ Overhead/unit $ $ Gross margin/unit $ $ Part 127 Part 234 Total Total Profit $ $ mendation Increase in price for Products by 25 Part 12 Part234 Selling Price/unit 5 $ Prime costs/unit S $ Overhead/unit S S Gross margin/unit 5 $ Total Part 127 Part 234 Total Profit Part 5: Another reasonable recommendation to improve profitability, Explain recommendation here: Per Unit Part 127 Part 234 Selling Price/unit $ Prime costs/unit S Overhead/unit $ Gross margin/unit $ $ Total Part 127 Part 234 Total Profit $ $ Part 6: Another reasonable recommendation to improve profitability Explain recommendation here: Part 127 Part 234 S $ Per Unit Selling Price/unit Prime costs/unit Overhead/unit Gross margin/unit S $ S $ Total Part 127 Part 234 Total Profit

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