Question

Elton Company manufactures wheel rims. The controller expects the following ABC allocation rates for 2014:


Elton produces two wheel rim models: standard and deluxe. Expected data for 2014 are as follows:


The company expects to produce 500 units of each model during the year.

Requirements
1. Compute the total estimated indirect manufacturing cost for 2014.
2. Compute the estimated ABC indirect manufacturing cost per unit of each model. Carry each cost to the nearest cent.
3. Prior to 2014, Elton used a direct labor hour single plantwide allocation rate system. Compute the allocation rate based on direct labor hours for 2014. Use this rate to determine the estimated indirect manufacturing cost per wheel rim for each model, to the nearestcent.


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  • CreatedJanuary 16, 2015
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