Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Vader's Helmet Corporation has four categories of overhead. The expected overhead costs for each category and the expected activity for the four activity-based cost drivers

image text in transcribedimage text in transcribedimage text in transcribed

Vader's Helmet Corporation has four categories of overhead. The expected overhead costs for each category and the expected activity for the four activity-based cost drivers that would be used in total for next year are as follows: Overhead Category Total Cost Cost Drivers Activity Level Maintenance $420,000 Machine-hours 20,000 Materials handling 180,000 Material moves 4,000 Setups 150,000 Setups 200 Inspection 300,000 Quality inspections 8,000 $1,050,000 Vader has been asked to submit a bid for a proposed job to make special black helmets that detach in parts. The plant manager believes that obtaining this job would result in new business in markets across the galaxy. Bids are usually based upon full manufacturing cost plus 30 percent. Estimates for the proposed job are as follows: Direct materials $10,000 Direct labor (750 hours) $15,000 Number of material moves 8 Number of inspections 5 Number of setups 3 Number of machine-hours 300 Required 1 (show your calculations) a) Determine the amount of overhead that would be applied to the proposed project if activity-based costing is used. b) Calculate the total costs of the proposed job using activity-based costing. c). Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent. (Round amounts to 2 decimal places.) Required 2 (show your calculations) a) Determine the amount of overhead that would be allocated to the proposed job if 40,000 direct labor-hours are used as the volume-based cost driver for the year (traditional method of allocation). b) Determine the total costs of the proposed job using the traditional method allocating overhead. c) Determine the company's bid using traditional method of overhead allocation and the bid is based upon full manufacturing cost plus 30 percent. (Round amounts to 2 decimal places.) Required 3 (show your calculations) Which product costing method produces the more competitive bid? For the toolbad AIT IDCONTEMLERINA

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Sovereign Debt Crisis The New Normal And The Newly Poor

Authors: D. Chorafas

1st Edition

0230298400, 9780230298408

More Books

Students also viewed these Accounting questions

Question

OUTCOME 3 Outline the methods by which firms recruit externally.

Answered: 1 week ago

Question

OUTCOME 2 Outline the methods by which firms recruit internally.

Answered: 1 week ago