How much total overhead is assigned to fudge using abc

Reference no: EM133589548

Homework: Activity Rates

Patten Company uses activity-based costing (ABC). Patten manufactures toy cars using two activities: plastic injection molding and decal application. Patten's 20X1 total budgeted overhead costs for these two activities are $492,000 (90% for injection molding and 10% for decal application). Molding overhead costs are driven by the number of pounds of plastic that are molded together. Decal application overhead costs are driven by the number of decals applied to toys. The budgeted activity data for 20X1 are as follows:

Line Item Description Numerical Data Pounds of plastic molded1,940,000 Number of decals applied197,000

Task

Question I. Calculate the activity rate for the plastic injection molding activity.

Question II. Calculate the activity rate for the decal application activity.

Comparing ABC and Plantwide Overhead Cost Homework

Castle Dale Company uses activity-based costing (ABC). The controller identified two activities and their budgeted costs:

Line Item Description Amount Setting up equipment$660,000Other overheard $2,376,000

Setting up equipment is based on setup hours, and other overhead is based on oven hours.

Castle Dale produces two products, Fudge and Cookies. Information on each product is as follows:
Line Item Description Fudge Cookies Batches produced16,000 890, 000 Setup hours12,0003,000 Oven hours 2,20015,400

Task

Question I. Calculate the activity rate for (i) setting up equipment and (ii) other overhead. Line Item DescriptionActivity ratea. Setting up equipment$fill in the blank 1 per setup hourb. Other overhead$fill in the blank 2 per oven hour

Question II. How much total overhead is assigned to Fudge using ABC?

Question III. What is the unit overhead assigned to Fudge using ABC? Round to the nearest cent.

Question IV. Now, ignoring the ABC results, calculate the plantwide overhead rate, based on oven hours. Round to the nearest cent.

Question V. How much total overhead is assigned to Fudge using the plantwide overhead rate?

Question VI. The difference in the total overhead assigned to Fudge is different under the ABC system and non-ABC system because different treatment of setup costs. Difference in the Batches produced. Difference in the sale prices of the products. Different oven temperatures required for baking fudge and cookies.

Question VII. What is the difference in total overhead assigned to fudge under the two methods?

Reference no: EM133589548

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