Question: Suppose that a widget (Product Alpha) used 60 machine hours from Department A and 150 machine hours from Department B. A second widget (Product

Suppose that a widget (Product Alpha) used 60 machine hours from Department A and 150 machine hours from Department B. A second widget (Product Beta) used 150 machine hours from Department A and 60 machine hours from Department B: 5. Compute the overhead cost assigned to each product using: a) the plantwide rate, and b) the departmental rates. 6. Which of the two approaches gives the fairest assignment? WHY? 7. NOW ASSUME that the expected overhead cost for Department B is $360,000. How much overhead would be assigned to each product using a) the plantwide rate, and b) the departmental rates Explain WHY your answers came out the way they did. 8. NOW would you recommend departmental rates over a plantwide rate?

Step by Step Solution

★★★★★

3.39 Rating (149 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Answer 5 Overhead Cost Assignment a Using the Plantwide Rate Lets assume the total ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Consider the following bond quotes for ABC and XYZ Corp. It is June 27, 2020. You must provide equations for each of the questions . Issuer Name Coupon Maturity Last Change Yield% ABC Corp. 4.375...

13. The joint density function of X and Y is given by f(x, y) = e(/v), x > 0, y > 0 Find E[X], E[Y] and show that Cov(X,Y) = 1.

The table below shows the total area under the normal curve for a point that is Z standard deviations to the right of the mean. Z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.0 0.5000 0.5040...

Suppose that a machine tool ( Product X 7 5 ) used 6 0 machine hours from Department A and 1 5 0 machine hours from Department B . A second machine tool ( Product Y 1 5 ) used 1 5 0 machine hours...

Department A 6 per machine hour Department B 3 per machine hour 3. Suppose that a machine tool (Product X75) used 50 machine hours from Department A and 150 machine hours from Department B. A second...

Statement of Cash Flows (Direct Method) The Artic Company's income statement and comparative balance sheets at December 31 of the current and previous year are shown below: ARTIC COMPANY Income...

1) Ayesha Inc. is known for manufacturing tables. During the month of april, the two production departments had budgeted allocation bases of 4,000 machine hours in Department Alpha and 8,000 direct...

has heard that I overhead rates can offer significantly bette than can a plantwide rate. Mariposa has the following data for its two departments for the coming year: $720,000 $180,000 100,000 50,000...

A company manufactures three products, Alpha, Beta, and Gama. Total overhead costs amount to $ 560,000. The company allocates these costs to products based on a predetermined overhead rate,...

The Texas Department of Transportation (TxDOT) is considering two designs for crash barriers along a reconstructed portion of 1-10. Design 2B will cost $3 million to install and $135,000 per year to...

FL Ltd has a defined benefit superannuation plan for its senior managers. Members of the plan had been entitled to 10% of their average salary for every year of service. The following information is...

Decimal values are also called what? Base 1 0 numbers Base 8 numbers Base 2 numbers Base 1 6 numbers

What are the unique characteristics of large energy projects, and why can't one apply the standard corporate finance framework to finance these projects?

Partnership VOL makes a current distribution of $20,000 cash and land to Partner V who has a one-third interest in the capital and profits of VOL. V's basis in his partnership interest before the...

Fred contributes cash of $350,000 to Strumble Partnership for his 50% interest in the partnership. For his 50% interest Gary contibutes a building with a fair market value of $550,000 and a basis of...

Which of the following will improve liquidity? (Select all that apply.) A company purchases a new truck with cash. A company receives cash from taking out a long-term loan that is due in five years....

Read the case study Bernard Arnault Vs LVMH and write a summary on it

A shaft carries five masses A, B, C, D and E which revolve at the same radius in planes which are equidistant from one another. The magnitude of the masses in planes A, C and D are 50 kg, 40 kg and...

Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs: Direct materials .......$1.67 Direct labor........ 0.56 Variable overhead ..........

Tiger Drug Store carries a variety of health and beauty aids, including 500-count bottles of vitamins. The sales budget for vitamins for the first six months of the year is presented below. The owner...

Carina Franks operates a catering company in Austin, Texas. Carina provides food and servers for parties. She also rents tables, chairs, dinnerware, glassware, and linens. Estefan and Maria Montero...

=+3. What is the Type A behavior pattern, and what specific aspect of it is most often linked to coronary disease?

=+1. Consider a facet of your personality that you might want to change. From the perspective of Freuds psychoanalytic theory and Rogerss

=+2. If the researchers concluded that the self-efficacy manipulation caused these differences, would their conclusion be justified? Explain.