Several years after reengineering its production process, Biltmore Corporation hired a new controller, Rachael Johnson. She developed an ABC system very similar to the one used by Biltmore€™s chief rival, Westriver. Part of the reason Johnson developed the ABC system was because Biltmore€™s profits had been declining even though the company had shifted its product mix toward the product that had appeared most profitable under the old system. Before adopting the new ABC system, Biltmore had used a plantwide over-head rate based on direct labor hours that was developed years ago. For the upcoming year, Biltmore€™s budgeted ABC manufacturing overhead allocation rates are as follows: Activity Allocation

The number of parts is now a feasible allocation base because Biltmore recently installed a plantwide computer system. Biltmore produces two wheel models: Standard and Deluxe. Budgeted data for the upcoming year are as follows: Standard Deluxe

The company€™s managers expect to produce 1,000 units of each model during the year.

Requirements
1.Compute the total budgeted manufacturing overhead cost for the upcoming year.
2. Compute the manufacturing overhead cost per wheel of each model using ABC.
3. Compute Biltmore€™s traditional plantwide overhead rate. Use this rate to determine the manufacturingoverhead cost per wheel under the traditional system

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Activity Cost Activity Materials handling Machine setup Insertion of parts Finishing Allocation Base Number of parts Number of setups Number of parts Finishing direct labor hours 54.00 per hour Allocation Rate $ 3.84 per part $330.00 per setup 30.00 per part Standard Deluxe Parts per wheel Setups per 1,000 wheels Finishing direct labor hours per whel Total direct labor hours per wheel 6.0 20.0 1.2 2.0 8.0 20.0 3.3 3.3