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Problem 4-25A (Algo) Fairness and cost pool allocations LO 4-1, 4-2, 4-3, 4-5 Stuart Manufacturing Company uses two departments to make its products. Department 1 is a cutting department that is machine intensive and uses very few employees. Machines cut and form parts and then place the finished parts on a conveyor beit that carries thern to Department II, where they are assembled into finished goods. The assembiy department is labor intensive and requires many workers to assemble parts into finished goods. The company's manufacturing facility incurs two significant overhead costs: employee fringe benefits and utility costs. The aninual costs of fringe benefits are $308,000 and utility costs are $236,000. The typical consumption pattems for the two departments are as follows, The supervisor of each department receives a bonus based on how well the department controls costs. The company's current policy fequires using a simgle allocation base (machine hours or abor hours) to alfocate the tatal overbead cost of $544,000 Required a. Assume that you are the supervisor of Department I Choose the aliocation base that would minimize your department's share of the total overhead cost Colculate the amount of oveitead that would be allocated to both departments using the base that you setected: b. Assume that you are the supervisor of Department il Choose the allocation base that would minemize your department's share of the total ovemead cost Calcilate the amount of overhe od that would be allocated to both departinents using the base that you selected c. Assume that you ate the plent marnager and have the authority to change the company's overhead allocation policy. Formulate an oveinead allocation policy that woukd be fait to the supervisors of both Department l and Department il Compute the oveinead allocations for each department using your policy Complete this question by enterisg your answers in the tabs belew. requires using a single allocation base (machine hours or labor hours) to allocate the total overhead cost of $544,000. Required a. Assume that you are the supervisor of Department L. Choose the allocation base that would minimize your department's share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected. b. Assume that you are the supervisor of Department li. Choose the aliocation base that would minimize your department's share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected c. Assume that you are the plant manager and have the authority to change the company's overhead allocation policy. Formulate an overhead allocation policy that would be fair to the supervisors of both Department I and Department il Compute the overhead allocations for each department using your policy. Complete this question by entering your answers in the tabs below. Asoume that you are the piant manager and have the authority to change the company's overhead allocation policy. Formulate an overhead allocation policy that would be fair to the supervisors of both Department I and Department if. Compute the overhead allocations for each department using your policy. (Do not round intermediate calculations.) a. Assume that you are the supervisor of Department 1. Choose the allocation base that would minimize your department's share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected b. Assume that you are the supervisor of Department II. Choose the allocation base that would minimize your department's share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected c. Assume that you are the plant manager and have the authority to change the company's overhead allocation policy. Formulate an overhead allocation policy that would be fair to the supervisors of both Department I and Department Il. Compute the overhead allocations for each department using your policy. Complete this question by entering your answers in the tabs below. Assume that you are the supervisor of Department II. Choose the allocation base that would minimize your department's share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected. (Do not round intermediate calculations.) Required Q. Assume that you are the supervisor of Department I. Choose the allocation base that would minimize your department's share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected b. Assume that you are the supervisor of Department it. Choose the allocation base that would minimize your department's share of the total overhead cost. Caiculate the amount of overhead that would be allocated to both departments using the base that you selected. c. Assume that you are the plant manager and have the authonty to change the company's overhead allocation policy. Formulate an overhead allocation policy that would be fair to the supervisors of both Department I and Department II. Compute the overhead allocations for each department using your policy. Complete this question by entering your answers in the tabs below. Assume that you are the supervisor of Department 1. Choose the allocation base that would minimize your department's share of the total overhead coet. Calculate the amount of overhead that would be allocited to both departments uaing the base that you selected (Do not round intermediate calculations.)