5-22 Plant-wide, department, and activity-cost rates. Acclaim Inc. makes two styles of trophies, basic and deluxe, and operates at capacity. Acclaim does large custom orders. Acclaim budgets to produce 10.000 basic trophies and 5,000 deluxe trophies, Manufacturing takes place in two production departments: forming and assembly. In the forming department, indirect manufacturing costs are accumulated in two cost pools, setup and general overhead. In the assembly department, all indirect manufacturing costs are accumulated in one general overhead cost pool. The basic trophies are formed in batches of 200 but be- cause of the more intricate detail of the deluxe trophies, they are formed in batches of 50. The controller has asked you to compare plant-wide, department, and activity-based cost allocation. Acclaim Budgeted Information for the Year Ended November 30, 2017 Forming Department Basic Deluxe Total $60,000 30,000 Direct materials $35,000 20,000 $95,000 Direct manufacturing labor Overhead costs Setup General overhead 50,000 48,000 32,000 Basic Deluxe Total Assembly Department Direct materials $5,000 $10,000 $15,000 40,000 Direct manufacturing labor 15,000 25,000 Overhead costs General overhead 40,000 1. Calculate the budgeted unit cost of basic and deluxe trophies based on a single plant-wide overhead rate, if total overhead is allocated based on total direct costs. (Don't forget to include direct material and direct manufacturing labor cost in your unit cost calculation.) 2. Calculate the budgeted unit cost of basic and deluxe trophies 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 manufacturing labor costs of the assembly department. 3. Calculate the budgeted unit cost of basic and deluxe trophies if Acclaim allocates overhead costs in each department using activity-based costing, where setup costs are allocated based on number of batches and general overhead costs for each department are allocated based on direct manufacturing labor costs of each department. lifforont ponte
5-22 Plant-wide, department, and activity-cost rates. Acclaim Inc. makes two styles of trophies, basic and deluxe, and operates at capacity. Acclaim does large custom orders. Acclaim budgets to produce 10.000 basic trophies and 5,000 deluxe trophies, Manufacturing takes place in two production departments: forming and assembly. In the forming department, indirect manufacturing costs are accumulated in two cost pools, setup and general overhead. In the assembly department, all indirect manufacturing costs are accumulated in one general overhead cost pool. The basic trophies are formed in batches of 200 but be- cause of the more intricate detail of the deluxe trophies, they are formed in batches of 50. The controller has asked you to compare plant-wide, department, and activity-based cost allocation. Acclaim Budgeted Information for the Year Ended November 30, 2017 Forming Department Basic Deluxe Total $60,000 30,000 Direct materials $35,000 20,000 $95,000 Direct manufacturing labor Overhead costs Setup General overhead 50,000 48,000 32,000 Basic Deluxe Total Assembly Department Direct materials $5,000 $10,000 $15,000 40,000 Direct manufacturing labor 15,000 25,000 Overhead costs General overhead 40,000 1. Calculate the budgeted unit cost of basic and deluxe trophies based on a single plant-wide overhead rate, if total overhead is allocated based on total direct costs. (Don't forget to include direct material and direct manufacturing labor cost in your unit cost calculation.) 2. Calculate the budgeted unit cost of basic and deluxe trophies 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 manufacturing labor costs of the assembly department. 3. Calculate the budgeted unit cost of basic and deluxe trophies if Acclaim allocates overhead costs in each department using activity-based costing, where setup costs are allocated based on number of batches and general overhead costs for each department are allocated based on direct manufacturing labor costs of each department. lifforont ponte
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
Section: Chapter Questions
Problem 4CMA: Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold...
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