Reference no: EM132162848

Questions:

A Part one: Create an excel file to show how much overhead was allocated to each of the three yacht models last year. Briefly explain the advantages and disadvantages of the current overhead allocation system.

B What would be the advantages and disadvantages of using more than one cost pool? What cost pools would you recommend if more than one pool is used and explain why you would recommend those pools (answer in Excel file, but no calculation required)

C Perkins Cove production manager proposes allocating overhead by direct labor hours since the different models of yachts require different amounts of labor Show in your created excel file (response to question A above) how much overhead would be allocated to each yacht (per unit and in total) under this direct labor allocation Show all supporting calculations, in a comparison table (comparing method A with method C)

D. Perkins Cove Yacht's controller developed the following data for use in activity-based costing (method D):

Most of Perkins Cove Yacht's sales come from the goose Rocks and the Kennebunkport, but sales of the Ogunquit model have been growing. Below is the company's sales, production, and cost information for last year.

Yacht	Goose Rocks	Kennebunkport	Ogunquit
Volume	150	110	25
Price	$140,000	$240,000	$1,050,000
Unit costs
Direct Materials	$30,000	$92,000	$310,000
Direct Labor	$54,000	$85,000	$640,000
Manufacturing Overhead	$30,000	$30,000	30,000
Total Unit Cost	$114,000	$207,000	$980,000
Unit Gross Profit	$26,000	$33,000	$70,000
Direct Labor Hours	1 200	1,300	5,940
Rate Der Hour	$45.00	$65.38	$170.74

Manufacturing overhead* is made up as follows:

Depreciation	$3,200,000
Maintenance	$1,800.000
Purchasing	$320.000
Inspection	$850,000
Indirect Materials	$490,000
Supervision	$1,700.000
Supplies	$190.000