• • Spinners, Co. manufactures wheel rims. The accounting office will be following ABC allocation rates for 2021.

    Activity	Allocation Base	Predetermined Overhead Allocation Rate
    Materials Handling	Number of Parts	$4.00 per part
    Machine Setup	Number of setups	$650.00 per setup
    Insertion Parts	Number of parts	$30.00 per part
    Finishing	Finishing direct labor hours	$81.00 per hour

    
    

    Spinners, Co. produces two wheel rim models: standard and deluxe.
    
    Expected data for 2021 are as follows:

    Information	Standard	Deluxe
    Parts per rim	2.0	10.0
    Setups per 500 rims	13.0	13.0
    Finishing hours per rim	3.0	3.0
    Total direct hours per rim	3.5	4.5

    
    

    Spinners, Co. in 2021, expects to produce a total of 500 units. of each model.
    
    (Round your answers to two decimal places when needed and use rounded answers for all future calculations).

    1. Compute the total estimated indirect manufacturing cost for 2021.

    Activity	Predetermined Overhead Allocation Rate	X	Total estimated quantity of the Allocation Base Used	=	Total Estimated Overhead Cost
    Materials Handling		X		=
    Machine Setup		X		=
    Insertion of Parts		X		=
    Finishing		X		=
    				Total Estimated Overhead Costs

    2. Compute the estimated ABC indirect manufacturing cost per unit of each model. Carry each cost to the nearest cent.

    Standard Rims	Predetermined Overhead Allocation Rate	X	Total estimated quantity of the Allocation Base Used	=	Total Estimated Overhead Cost
    Materials Handling		X		=
    Machine Setup		X		=
    Insertion of Parts		X		=
    Finishing		X		=
    				Manufacturing overhead cost per rim

    
    

    Deluxe Rims	Predetermined Overhead Allocation Rate	X	Total estimated quantity of the Allocation Base Used	=	Total Estimated Overhead Cost
    Materials Handling		X		=
    Machine Setup		X		=
    Insertion of Parts		X		=
    Finishing		X		=
    				Manufacturing overhead cost per rim

    3. Prior to 2021, Spinners, Co. used a direct labor hour single plantwide overhead allocation rate system. Compute the predetermined overhead allocation rate based on direct labor hours for 2021. Use this rate to determine the estimated indirect manufacturing cost per wheel rim for each model to the nearest cent.

    Estimated DLHr per rim	X	Number of rims	=	Total estimated direct labor hours
    	X		=

    
    

    Total estimated overhead cost	/	Total estimated quantity of the overhead allocation base	=	Predetermined Overhead Allocation Rate
    	/		=

    
    

    Type of Rim	Predetermined Overhead Allocation rate	X	Actual Quantity of the Allocation Base Used	=	Allocated Manufacturing Overhead Cost
    Standard Rims		X		=
    Deluxe Rims		X		=