Koehler makes handheld calculators in two models--basic and professional. Koehler estimated $721,000 of manufacturing overhead and 515,000 machine hours for the year. The basic model actually consumed 230,000 machine hours, and the professional model consumed 285,000 machine hours. The predetermined overhead allocation rate using machine hours as the allocation base is $1.40 per machine hour, with the allocated overhead costs split between the basic model and the professional model by $322,000 and $399,000, respectively.

Data table Basic Model Professional Model $ Manufacturing overhead-Assembly Manufacturing overhead-Packaging Total manufacturing overhead cost 203,500 $ 40,000 253,000 224,500 $ 243,500 $ 477,500 Print Done at allocation rates.) More info - Koehler wants to further refine its costing system by allocating overhead using activity-based costing. The estimated $721,000 of manufacturing overhead has been divided into three primary activities: Materials Handling, Machine Setup, and Insertion of Parts. The following data have been compiled: Materials Handling Insertion of Parts Total Overhead costs Machine Setup $ 136,000 Number of setups $45,000 Number of parts $ 721,000 $540,000 Number of parts Allocation Base Expected usage: Basic Model Professional Model 32 parts per calculator 24 setups per year 58 parts per calculator 44 setups per year 32 parts per calculator 58 parts per calculator Print Done Requirements 1. Koehler expects to produce 200,000 basic models and 200,000 professional models. Compute the predetermined overhead allocation rates using activity-based costing. How much overhead is allocated to the basic model? To the professional model? Round the materials handling allocation rate to four decimal places and the remaining allocation rates to the nearest cent. 2. Compare the activity-based costing results from Requirement 1 with the company's results using a single plantwide rate and using multiple department rates by summarizing the total and per unit overhead allocated to each model under each of the three different allocation methods. Round per unit amounts to the nearest cent. What conclusions can you draw? Print Done