A B C D E F G H 1 Activity-Based Costing, Lean Operations, and the Costs of Quality 2 Compute activity rates and apply to jobs 3 Fuller Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the 4 upcoming year and their allocation bases are as follows: 5 6 TREN Activity Materials handling 7 8 Machine setup 9 Insertion of parts 10 Finishing 11 Total 12 Total Budgeted Manufacturing Overhead Cost Allocation Base $12,000 Number of parts 3,400 Number of setups 48,000 Number of parts 80,000 Finishing direct labor $143,400 Fuller Company expects to produce 1,000 chrome wheels during the year. The 13 wheels are expected to use: 14 15 16 Parts Setups Finishing Hours Consumed 3,000 10 2,000 Finishing Parts 17 Used Setups Hours Required Consumed 18 Job 420 200 2 130 19 Job 510 425 4 350 20 21 Use the blue shaded areas on the ENTERANSWERS tab for inputs. Always use cell references and formulas where appropriate to receive full credit. If 22 you copy/paste from the Instruction tab you will be marked wrong. 23 24 Requirements 25 1 Compute the cost allocation rate for each activity. 26 2 Compute the manufacturing overhead cost that should be assigned to Job 420. 27 3 Compute the manufacturing overhead cost that should be assigned to Job 510. 28 A 1 1. Compute the cost allocation rate for each activity. B C D (Always use cell references and formulas where appropriate to receive full 2 credit. If you copy/paste from the Instruction tab you will be marked wrong.) 2345 Fuller Company Computation of Cost Allocation Rates 6 7 Materials handling 8 Machine setup 9 Insertion of parts Activity Activity Cost Allocation Rate per part per setup per part per hour 10 Finishing 11 12 2. Compute the manufacturing overhead cost that should be assigned to Job 420. (Always use cell references and formulas where appropriate to receive full 13 credit. If you copy/paste from the Instruction tab you will be marked wrong.) 14 15 16 17 Job 420 Manufacturing overhead allocation Activity 18 Materials handling 19 Machine setup 20 Insertion of parts 21 Finishing 22 Total 23 MOH assigned 24 3. Compute the manufacturing overhead cost that should be assigned to Job 510. (Always use cell references and formulas where appropriate to receive full 25 credit. If you copy/paste from the Instruction tab you will be marked wrong.) 26 27 28 29 Job 510 Manufacturing overhead allocation 30 Materials handling 31 Machine setup 32 Insertion of parts 33 Finishing 34 Total 35 Activity MOH assigned