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 Requirement 1. Using the simple costing system, compute the plantwide var Determine the formula needed to calculate overhead using the simple costing Cost drivers information - X customer in 2018 Use of Cost Drivers by Customer o the nearest cent) Total variable overhead Total machine-hours Department Cost Driver Variable MOH in 2018 United Motors Anthony Motors Lowell Vehicle Design CAD design-hours $ 42.000 115 202 83 Calculate the overhead allocated to each customer using the simple costing United A Engineering Production Machine-hours Engineering-hours 30.000 85 78 237 240.000 120 2.800 1.080 Motors S 312.000 Total Choose from any list or enter any number in the input fields and then con Pant Done Compu their s n of tin ute the sing the machine ing the si Un 52 M 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 concerns? 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? put fields Print Done allocated und your a