Wheeler Place (WP) designs, manufactures, and sells automotive parts. Actual variable manufacturing overhead costs for 2018 were $312,000. WP's simple costing system allocates variable manufacturing overhead to its three customers based on machine-hours and prices its contracts based on full costs. One of its customers has regularly complained of being charged non-competitive prices, so WP's controller, Devon Smith, realizes that it is time to examine the consumption of resources more closely WP has three main operating departments: design, engineering, and production. *Design-the design of parts, using state-of-the-art, computer-aided design (CAD) equipment Engineering-the prototyping of parts and testing of their specifications. Production-the manufacture of parts Interviews with the department personnel and examination of time records yield the following detailed information 0 Required - X 1. Using the simple costing system, compute the plantwide variable manufacturing overhead rate for 2018 and the variable manufacturing overhead allocated to each contract in 2018 2. Compute the variable manufacturing overhead rate for 2018 and the variable manufacturing overhead allocated to each contract in 2018 using department-based variable overhead rates. 3. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will be unhappy? How would you respond to these concems? 4. How else might WP use the information available from its department-by-department analysis of variable manufacturing overhead costs? 5. WP's managers are wondering if they should further refine the department-by-department costing system into an ABC system by identifying different activities within each department. Under what conditions would it not be worthwhile to further refine the department costing system into an ABC system? M Print D Done 40007 stion Cost drivers information Department Cost Driver Variable MOH in 2018 Design CAD design-hours $ Engineering Engineering-hours United Use of Cost Drivers by Customer Anthony Lowell Motors Motors Vehicle 42,000 115 202 83 30,000 240,000 85 76 237 Production Machine-hours 120 2.800 1,080 $ 312,000 Total ASUS VivoBook 8 Print Done R G H K Engineering-the prototyping of parts and testing of their specifications. Production-the manufacture of parts. Interviews with the department personnel and examination of time records yield the following detailed information. Click the icon to view the cost drivers information.) Required Requirement 1. Using the simple costing system, compute the plantwide variable manufacturing overhead rate for 2018 and the variable manufacturing overhead allocated to each customer in 2018. Determine the formula needed to calculate overhead using the simple costing method and then calculate WP's variable manufacturing overhead rate for 2018. (Round your answer to the nearest cent.) = Variable overhead rate - Simple costing per machine-hour Calculate the overhead allocated to each customer using the simple costing method. (Round your answers to the nearest cent.) United Motors Anthony Motors Lowell Motors Total Variable overhead allocations (simple costing system) Requirement 2. Compute the variable manufacturing overhead rate for 2018 and the variable manufacturing overhead allocated to each customer in 2018 using department-based variable overhead rates. WP's 2018 variable manufacturing overhead rates by department are as follows. Department Variable Manufacturing Overhead Rate (by Department) Choose from any list or enter any number in the input fields and then continue to the next question. ASUS VivoBook 8 3 5 103 D G W E R T S D F G H J K C BN M Wheeler Place (WP) designs, manufactures, and sells automotive parts. Actual variable manufacturing overhead costs for 2018 were $312,000. WP's simple costing system allocates variable manufacturing overhea machine-hours and prices its contracts based on full costs. One of its customers has regularly complained of being charged non-competitive prices, so WP's controller, Devon Smith, realizes that it is time to examine WP has three main operating departments: design, engineering, and production. Design-the design of parts, using state-of-the-art, computer-aided design (CAD) equipment. Engineering-the prototyping of parts and testing of their specifications. Production-the manufacture of parts. Interviews with the department personnel and examination of time records yield the following detailed information. Click the icon to view the cost drivers information.) Required Variable overhead allocations (simple costing system) Requirement 2. Compute the variable manufacturing overhead rate for 2018 and the variable manufacturing overhead allocated to each customer in 2018 using department-based variable overhead rates. WP's 2018 variable manufacturing overhead rates by department are as follows. Department Variable Manufacturing Overhead Rate (by Department) per Design Engineering Production... per per Calculate the overhead allocated to each customer, by department, using the departmental variable manufacturing overhead rates calculated in the previous step. Calculate the total overhead cost for each departmen United Anthony Lowell Department Motors Motors Motors Total Design Choose from any list or enter any number in the input fields and then continue to the next question ASUS VivoBook 2018 10007 8 5 3 W E R T Y D Wheeler Place (WP) designs, manufactures, and sells automotive parts. Actual variable manufacturing overhead costs for 2018 were $312.000 WP's simple costing system allocates variable manufacturing overhead to its three customers based on machine-hours and prices its contracts based on full costs. One of its customers has regularly complained of being charged non-competitive prices, so WP's controller, Devon Smith, realizes that it is time to examine the consumption of resources more c WP has three main operating departments: design, engineering, and production. Design-the design of parts, using state-of-the-art, computer-aided design (CAD) equipment. Engineering-the prototyping of parts and testing of their specifications. Production-the manufacture of parts. Interviews with the department personnel and examination of time records yield the following detailed information. Click the icon to view the cost drivers information.) Required Engineering Production per per Calculate the overhead allocated to each customer, by department, using the departmental variable manufacturing overhead rates calculated in the previous step. Calculate the total overhead cost for each department and each customer Department Design Engineering Production Total United Motors Anthony Motors Lowell Motors Total Requirement 3. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will unhappy? How would you respond to these concerns? Under the simple costing system. was likely unhappy about its bill because the contract appears to have been Choose from any list or enter any number in the input fields and then continue to the next question. If the new department-based rates are used to price contracts. will likely be happier about its bill 20 W ASUS VivoBook 3 U Y T R E 8 24 P 274 Wheeler Place (WP) designs, manufactures, and sells automotive parts. Actual variable manufacturing overhead costs for 2018 were $312,000. WP's simple costing system allocates variable manufacturing overhead to its three customers based on machine-hours and prices its contracts based on full costs. One of its customers has regularly complained of being charged non-competitive prices, so WP's controller, Devon Smith, realizes that it is time to examine the consumption of resources more closely WP has three main operating departments: design, engineering, and production. *Design-the design of parts, using state-of-the-art, computer-aided design (CAD) equipment. *Engineering-the prototyping of parts and testing of their specifications. Production-the manufacture of parts. Interviews with the department personnel and examination of time records yield the following detailed information (Click the icon to view the cost drivers information.) Required Department United Anthony Motors Motors Lowell Motors Total Design Engineering Production * Total Requirement 3. Comment on your answers in requirements 1 and 2. Which customer do you think was complaining about being overcharged in the simple system? If the new department-based rates are used to price contracts, which customer(s) will be unhappy? How would you respond to these concerns? If the new department-based rates are used to price contracts will likely be unhappy. This is because their bills under the simple costing system appear to have been Under the simple costing system. was likely unhappy about its bill because the contract appears to have been If the new department-based rates are used to price contracts If the new department-based rates are used, WP should explain to the unhappy customers how the calculation was done and point out their high use of Choose from any list or enter any number in the input fields and then continue to the next question relative to will likely be happier about its bill Using the department-based rates, their bills will be W E R 50 ASUS VivoBook 8 P