Swifty Corp. makes many products but is best known for its two styles of park benches:...

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Swifty Corp. makes many products but is best known for its two styles of park benches: Classic and Modern. Swifty initially set up its MOH allocation system to pool all MOH costs into two key departments: Assembly and Finishing. It based Assembly MOH costs on machine hours, and Finishing MOH costs on DL hours. The company understood its costs, set selling prices to cover its costs, and carried on smoothly-until now. Swifty's president received some phone calls from community members complaining about the bench pricing and reporting that a non-community supplier is priced 25% lower than Swifty's listed price. In an effort to better understand its costs, Swifty's accountants gathered the following information for the two departments. Then it found more detailed information on key activities within its overhead costs. Quantity Used by: Departments Budgeted MOH Cost Budgeted Allocation Base Classic Modern Assembly $687,500 125,000 machine hours 54,000 31,000 Finishing 450,500 50,000 direct labor hours 20,000 20,000 Total 1,138,000 Quantity Used by: Key Activities Budgeted MOH Cost Budgeted Allocation Base Classic Modern Materials handling $136,000 17,000 material moves 4,100 2,600 Production setup 196,000 7,000 production runs 2,500 1,700 Assembly 420,000 70,000 direct labor hours 20,000 20,000 Quality control 160,500 321,000 inspections 36,000 18,000 Factory depreciation 225,500 451,000 square feet of space 155,000 90,000 Total $1,138,000 (a) Calculate the departmental MOH rates and allocate costs to the two park bench models as if Swifty continues to follow its current two-department MOH system. (Round MOH rates to 2 decimal places, e.g. 15.25.) Departmental Rate Assembly $ per machine hour Finishing per DL hour MOH Applied to Classic Benches Applied MOH for Activity Assembly $ Finishing Total applied MOH $ MOH Applied to Modern Benches Applied MOH for Actívity Assembly $ Finishing Total applied MOH $ Swifty Corp. makes many products but is best known for its two styles of park benches: Classic and Modern. Swifty initially set up its MOH allocation system to pool all MOH costs into two key departments: Assembly and Finishing. It based Assembly MOH costs on machine hours, and Finishing MOH costs on DL hours. The company understood its costs, set selling prices to cover its costs, and carried on smoothly-until now. Swifty's president received some phone calls from community members complaining about the bench pricing and reporting that a non-community supplier is priced 25% lower than Swifty's listed price. In an effort to better understand its costs, Swifty's accountants gathered the following information for the two departments. Then it found more detailed information on key activities within its overhead costs. Quantity Used by: Departments Budgeted MOH Cost Budgeted Allocation Base Classic Modern Assembly $687,500 125,000 machine hours 54,000 31,000 Finishing 450,500 50,000 direct labor hours 20,000 20,000 Total 1,138,000 Quantity Used by: Key Activities Budgeted MOH Cost Budgeted Allocation Base Classic Modern Materials handling $136,000 17,000 material moves 4,100 2,600 Production setup 196,000 7,000 production runs 2,500 1,700 Assembly 420,000 70,000 direct labor hours 20,000 20,000 Quality control 160,500 321,000 inspections 36,000 18,000 Factory depreciation 225,500 451,000 square feet of space 155,000 90,000 Total $1,138,000 (a) Calculate the departmental MOH rates and allocate costs to the two park bench models as if Swifty continues to follow its current two-department MOH system. (Round MOH rates to 2 decimal places, e.g. 15.25.) Departmental Rate Assembly $ per machine hour Finishing per DL hour MOH Applied to Classic Benches Applied MOH for Activity Assembly $ Finishing Total applied MOH $ MOH Applied to Modern Benches Applied MOH for Actívity Assembly $ Finishing Total applied MOH $

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Departmental Rate Departmental Rate Assembly 550 per machine hour Finishing 90... View the full answer