Direct material Direct labor Collection Facility Overhead Division Overhead YEAR 5 SUMMARY ww AB $ 2.430,000.00 $ 1,215,000.00 $4,800,000.00 $ 200,000.00 $ 4,181,299.20 $ 174,220.80 $ 3,936,000.00 $ 164,000.00 $ 15,347,299.20 $ 1,753,220.80 YEAR 6 SUMMARY ww AB $1,215,000.00 $ 4,252,500.00 $ 3,669,907.50 $ 611,604.00 $ 4,263,047.05 $ 710,452.95 $ 3,266,217.68 $ 544,327.56 $ 12,414,172.22 $ 6,118,884.51 Cost per Bin $ 127.89 $ 58.44 $ 137.94 $ 67.99 Year 5 ww 120,000 AB 30,000 Year 6 ww 90,000 AB 90,000 Total bins processed Production Mix Overhead Allocation Base = Output Collection Facility Total Overhead $ 4,355,520.00 $ 4,973,500.00 ww AB ww AB Collection Facility Overhead Allocation Division Overhead Total $4,100,000.00 $ 3,810,545.00 ww AB ww AB Division Overhead Summary of Costs using Output as Overhead Allocation Base Direct material Direct labor Collection Facility Overhead Division Overhead YEAR 5 SUMMARY ww AB $ 2,430,000.00 $ 1,215,000.00 $ 4,800,000.00 $ 200,000.00 YEAR 6 SUMMARY ww AB $ 1,215,000.00 $ 4,252,500.00 $ 3,669,907.50 $ 611,604.00 $ 7,230,000.00 $ 1,415,000.00 $ 4,884,907.50 S 4,864,104.00 Cost per Bin Table 1: Year 5 Actual Results by Product Operated at approximately 95% of facility capacity Total bins processed Actual price paid per usable cubic yard of input Average direct labor time per bin ww 120,000 $4.05 AB 30,000 $8.10 4 hours Table 2: Year 5 Actual Costs Average wage earned DL employee* Total cost machine operations Collection facility manager salary (each has one) Other indirect labor Other facility overhead Allocation rate for corporate overhead (as percentage of direct labor cost) $10 per hour $2,400,000 $45,000 $70,000 $985,520 82% *Each full-time equivalent employee works 40 hours per week and 50 weeks per year. Direct labor is traced to each type of product (AB or WW) for costing purposes. However, the salaries of facility managers and the wages of machine operators are included as part of total collection facility overhead, which is allocated to AB and WW using direct labor cost as an allocation base. Total collection facility overhead also includes some "Other Indirect Labor", which totaled $70,000 in Year 5. "Other Indirect Labor" costs are fixed with respect to production. MEM has one additional category of collection facility overhead called "Other Facility Overhead" that includes repairs, utilities, insurance, but the largest component of this category is depreciation on machinery and buildings. "Other Facility Overhead" totaled $985,520 in Year 5. In addition to facility overhead, each collection facility is allocated a share of corporate-level overhead which includes the cost of executive salaries as well as centralized support services (such as human In February of Year 7, in advance of Year 6 performance evaluations for division managers, The Mulch Company's coo was reviewing cost data prepared by the company's controller for MEM's collection facilities. In addition to the summary report for the 20 collection facilities, the controller provided the following information regarding Year 6: The price paid for a usable cubic yard of WW material decreased by 1/3 but the premium paid for each cubic yard of AB material increased to 250% of WW prices. As of January 1, Year 6, all wage rates and salaries were increased by 5% across the board at all collection facilities Table 3: Year 6 Results Total bins processed ww 90,000 AB 90,000 Total direct labor cost Total machine operator cost Allocation rate for corporate overhead Other facility overhead Allocation rate for corporate overhead (as percentage of direct labor cost) $4,281,512 $2,800,000 $45,000 $1,155,000 89% Other data to assist with analysis of this case: Table 4: Containers Cubic Yards Cubic Feet 2 Cubic Foot Bags Dumpster containers hold 20 540 270 Temporary Sorting Collection 135 67.5 Bins/Bag 5 Total direct labor cost Total machine operator cost Allocation rate for corporate overhead Other facility overhead Allocation rate for corporate overhead (as percentage of direct labor cost) $4,281,512 $2,800,000 $45,000 $1,155,000 89% Other data to assist with analysis of this case: Table 4: Containers Dumpster containers hold Temporary Sorting Collection Bins/Bag Cubic Yards Cubic Feet 2 Cubic Foot Bags 20 540 270 5 135 67.5 Table 5: Raw Material Costs per Cubic Ft Year 5 Year 6 ww $0.15 $0.10 AB $0.30 $0.35 Table 6: Direct Labor Hours per Bin Year 5 Year 6 ww 4 3.8835 AB .666666667 .6472 Direct material Direct labor Collection Facility Overhead Division Overhead YEAR 5 SUMMARY ww AB $ 2.430,000.00 $ 1,215,000.00 $4,800,000.00 $ 200,000.00 $ 4,181,299.20 $ 174,220.80 $ 3,936,000.00 $ 164,000.00 $ 15,347,299.20 $ 1,753,220.80 YEAR 6 SUMMARY ww AB $1,215,000.00 $ 4,252,500.00 $ 3,669,907.50 $ 611,604.00 $ 4,263,047.05 $ 710,452.95 $ 3,266,217.68 $ 544,327.56 $ 12,414,172.22 $ 6,118,884.51 Cost per Bin $ 127.89 $ 58.44 $ 137.94 $ 67.99 Year 5 ww 120,000 AB 30,000 Year 6 ww 90,000 AB 90,000 Total bins processed Production Mix Overhead Allocation Base = Output Collection Facility Total Overhead $ 4,355,520.00 $ 4,973,500.00 ww AB ww AB Collection Facility Overhead Allocation Division Overhead Total $4,100,000.00 $ 3,810,545.00 ww AB ww AB Division Overhead Summary of Costs using Output as Overhead Allocation Base Direct material Direct labor Collection Facility Overhead Division Overhead YEAR 5 SUMMARY ww AB $ 2,430,000.00 $ 1,215,000.00 $ 4,800,000.00 $ 200,000.00 YEAR 6 SUMMARY ww AB $ 1,215,000.00 $ 4,252,500.00 $ 3,669,907.50 $ 611,604.00 $ 7,230,000.00 $ 1,415,000.00 $ 4,884,907.50 S 4,864,104.00 Cost per Bin Table 1: Year 5 Actual Results by Product Operated at approximately 95% of facility capacity Total bins processed Actual price paid per usable cubic yard of input Average direct labor time per bin ww 120,000 $4.05 AB 30,000 $8.10 4 hours Table 2: Year 5 Actual Costs Average wage earned DL employee* Total cost machine operations Collection facility manager salary (each has one) Other indirect labor Other facility overhead Allocation rate for corporate overhead (as percentage of direct labor cost) $10 per hour $2,400,000 $45,000 $70,000 $985,520 82% *Each full-time equivalent employee works 40 hours per week and 50 weeks per year. Direct labor is traced to each type of product (AB or WW) for costing purposes. However, the salaries of facility managers and the wages of machine operators are included as part of total collection facility overhead, which is allocated to AB and WW using direct labor cost as an allocation base. Total collection facility overhead also includes some "Other Indirect Labor", which totaled $70,000 in Year 5. "Other Indirect Labor" costs are fixed with respect to production. MEM has one additional category of collection facility overhead called "Other Facility Overhead" that includes repairs, utilities, insurance, but the largest component of this category is depreciation on machinery and buildings. "Other Facility Overhead" totaled $985,520 in Year 5. In addition to facility overhead, each collection facility is allocated a share of corporate-level overhead which includes the cost of executive salaries as well as centralized support services (such as human In February of Year 7, in advance of Year 6 performance evaluations for division managers, The Mulch Company's coo was reviewing cost data prepared by the company's controller for MEM's collection facilities. In addition to the summary report for the 20 collection facilities, the controller provided the following information regarding Year 6: The price paid for a usable cubic yard of WW material decreased by 1/3 but the premium paid for each cubic yard of AB material increased to 250% of WW prices. As of January 1, Year 6, all wage rates and salaries were increased by 5% across the board at all collection facilities Table 3: Year 6 Results Total bins processed ww 90,000 AB 90,000 Total direct labor cost Total machine operator cost Allocation rate for corporate overhead Other facility overhead Allocation rate for corporate overhead (as percentage of direct labor cost) $4,281,512 $2,800,000 $45,000 $1,155,000 89% Other data to assist with analysis of this case: Table 4: Containers Cubic Yards Cubic Feet 2 Cubic Foot Bags Dumpster containers hold 20 540 270 Temporary Sorting Collection 135 67.5 Bins/Bag 5 Total direct labor cost Total machine operator cost Allocation rate for corporate overhead Other facility overhead Allocation rate for corporate overhead (as percentage of direct labor cost) $4,281,512 $2,800,000 $45,000 $1,155,000 89% Other data to assist with analysis of this case: Table 4: Containers Dumpster containers hold Temporary Sorting Collection Bins/Bag Cubic Yards Cubic Feet 2 Cubic Foot Bags 20 540 270 5 135 67.5 Table 5: Raw Material Costs per Cubic Ft Year 5 Year 6 ww $0.15 $0.10 AB $0.30 $0.35 Table 6: Direct Labor Hours per Bin Year 5 Year 6 ww 4 3.8835 AB .666666667 .6472