Question
Triumph Trophies makes trophies and plaques and operates at capacity. Triumphdoes large custom orders, such as the participant trophies for the Minnetonka Little League. The
Triumph Trophies makes trophies and plaques and operates at capacity. Triumphdoes large custom orders, such as the participant trophies for the Minnetonka Little League. The controller has asked you to compareplant-wide, department, and activity-based cost allocation.
Triumph Trophies Budgeted Information for the Year Ended November 30, 2014 |
Forming Department | Trophies | Plaques | Total |
Direct materials | $26,000 | $23,500 | $49,500 |
Direct manufacturing labor | 30,200 | 13,800 | 44,000 |
Overhead costs | |||
Set up | 21,560 | ||
Supervision | 20,680 | ||
Assembly Department | Trophies | Plaques | Total |
Direct materials | $4,900 | $87,150 | $92,050 |
Direct manufacturing labor | 15,500 | 15,500 | 31,000 |
Overhead costs | |||
Setup | 45,095 | ||
Supervision | 16,430 |
Setup costs in each department vary with the number of batches processed in each department. The budgeted number of batches for each product line in each department is as follows:
| Trophies | Plaques |
Forming department | 37 | 117 |
Assembly department | 43 | 102 |
Supervision costs in each department vary with direct manufacturing labor costs in each department.
1. | Calculate the budgeted cost of trophies and plaques based on a singleplant-wide overhead rate, if total overhead is allocated based on total direct costs. |
2. | Calculate the budgeted cost of trophies and plaques based on departmental overhead rates, where forming department overhead costs are allocated based on direct manufacturing labor costs of the forming department and assembly department overhead costs are allocated based on total direct costs of the assembly department. |
3. | Calculate the budgeted cost of trophies and plaques if Triumph allocates overhead costs in each department using activity-based costing. |
4. | Explain how the disaggregation of information could improve or reduce decision quality. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started