Allen Enterprises manufactures two models of industrial components--a Basic model and an Advanced Model. The company considers all of its manufacturing overhead costs to be fixed and it uses plantwide manufacturing overhead cost allocation based on direct labor-hours. The company's controller prepared the segmented income statement that is shown below for the most recent year the allocated selling and administrative expenses to products based on sales dollars): Number of units produced and sold Basic 20,000 Advanced 10,000 Total 30,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Het operating incone (loss) $3,000,000 2,300,000 700,000 720,000 $ (20,000) $2,000,000 1,350,000 650,000 480,000 $ 170,000 $5,000,000 3,650,000 1,350,000 1,200,000 $ 150,000 Direct laborers are paid $20 per hour. Direct materials cost $40 per unit for the Basic model and $60 per unit for the Advanced model. Management is considering a change from plantwide overhead allocation to a departmental approach. The overhead costs in the company's Molding Department would be allocated based on machine hours and the overhead costs in its Assemble and Pack Department would be allocated based on direct labor-hours. To enable further analysis, the controller gathered the following Information: Molding 5.707,500 Assemble and Pack 5562.500 Total 51.350,000 Manufacturing overhead coats Direct labor-hours Basle Advanced Machine-hours Basic Advanced 10,000 5.000 20.000 10,000 30,000 15,000 12,000 10,000 12.000 10.000 Required: 1. Using the plantwide approach: a. Calculate the plantwide overhead rate. b. Calculate the amount of overhead that would be assigned to each product. 2. Using a departmental approach: a. Calculate the departmental overhead rates. b. Calculate the total amount of overhead that would be assigned to each product. c. Using your departmental overhead cost allocations, redo the controller's segmented income statement (continue to allocate selling and administrative expenses based on sales dollars). 3. Allen Enterprises' production manager has suggested using activity-based costing instead of either the plantwide or departmental approaches. To facilitate the necessary calculations, she assigned the company's total manufacturing overhead cost to four activity cost pools as follows: Activity Cost Pool Machining Assemble and pack Order processing Setup Activity Measure Machine-hours in Molding Direct Labor-hours in Armble and Pack Number of customer order Setup hours Manufacturing overhead $ 417.500 282.500 310,000 340,000 $1,350.000 She also determined that the average order size for the Basic and Advanced models is 400 units and 50 units, respectively. The molding machines require a setup for each order. One setup hour is required for each customer order of the Basic model and three hours are required to setup for an order of the Advanced model Using the additional information provided by the production manager, calculate: An activity rate for each activity cast cool a. An activity rate for each activity cost pool. b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approach. 4. The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertising expenses include $150,000 for the Basic model and $200,000 for the Advanced model. The remainder of the company's selling and administrative costs are common fixed expenses. Using your activity-based cost assignments from requirement 3, prepare a contribution format segmented income statement that is adapted from Exhibit 7-8. (HINTS. (1) Organize all of the company's costs into three categories: variable expenses, traceable fixed expenses, and common fixed expenses. (lRecall that total selling and administrative expenses include both variable and fixed costs. Those that are not clearly variable should be treated as fixed, which are either traceable to a product line or common fixed costs. (E) Note that for the segmented income statements, you should treat the product costs (DM, DL and OH) associated with a product as directly traceable to the segment.) 5. Using your contribution format segmented income statement from requirement 4 calculate the break-even point in dollar sales for the Advanced model. (HINT: the Breakeven point for a given segment will be calculated as Segment Traceable fixed expenses divided by Segment Contribution Margin Ratio since the traceable (.e., direct) fixed costs can be identified in this problem) Complete this question by entering your answers in the tabs below. Req 1A Reg 13 Reg 2A Reg 28 Reg 2C Req 3A Reg 36 Reg 4 Reg 5 Calculate the plantwide overhead rate. Plantwide overhead rate por DLH Reg 18 > by Segment Contribution Margin Ratio since the traceable (.e., direct) fixed costs can be identified in this problem.) Complete this question by entering your answers in the tabs below. Reg 1A Req Reg 2A Req 2B Reg 20 Req 3A Req 38 Reg 4 Req 5 Calculate the amount of overhead that would be assigned to each product Basic Advanced Amount of overhead Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2A Reg 2B Reg 2c Reg 3A Reg 3B Req 4 Req 5 Calculate the departmental overhead rates. (Round your answers to 2 decimal places.) Molding Department Assemble and Pack Department per DLH Manufacturing overhead rate per MH Complete this question by Reg 1A Reg 1B Req 2A Reg 2B Reg 2C Reg 3A Reg 5 Req 3B Req 4 Calculate the total amount of overhead that would be assigned to each product. (Round your intermediate calculations to 2 decimal places.) Basic Advanced Molding Department Assemble and Pack Department Total manufacturing overhead assigned $ 0 $ 0 by Segment Contribution Margin Raub since Complete this question by entering your answers in the tabs below. Regal Req 1A Reg 1B Reg 2A Reg 28 Req Req 3B Reg 4 Reg 5 Using your departmental overhead cost allocations, redo the controller's segmented income statement (continue to allocate selling and administrative expenses based on sales dollars). (Round your intermediate calculations to 2 decimal places.) Basic Advanced Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income the Advanced model. (HINT: the Breakeven point for a given segment will be calculated as: Segment Traceable fixed expenses di by Segment Contribution Margin Ratio since the traceable (l.e., direct) fixed costs can be identified in this problem.) Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2A Req 2B Reg 20 Regla Reg 3B Reg 4 Reg 5 Calculate an activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Coat Pool Machining Assemble and pack Order processing Setup Activity Rate per MH per DLH per order per hour Complete this question by entering your answers in the tabs below. Req 1A Reg 18 Req 2A Reg 2B Req 2c Req Reqbe Reg 4 Reg 5 Calculate the total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity- based approach. (Round your intermediate calculations to 2 decimal places.) Basic Advanced Machining Assemble and pack Order processing Setups Total overhead cost assigned $ 0 $ 0 0 Total variable expenses 0 0 0 Traceable fixed expenses: 0 0 Total traceable fixed expenses Segment margin Common foxed expenses. $ 0 $ 0 Total common foxed expenses 0 $ 0 Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2A Req 2B Reg 2c Req Req 3B Reg 4 Reg 5 Using your contribution format segmented income statement from requirement 4, calculate the break-even point in dollar sales for the Advanced model. (Round your intermediate calculations to 2 decimal places. Round your final answer to the nearest whole dollar) Break-even point in dollar sales