I need help with requirements 2 and 3, please. Thank you! Several years after re
ID: 2330441 • Letter: I
Question
I need help with requirements 2 and 3, please. Thank you!
Several years after reengineering its production process, Trudell Corporation hired The number of parts is now a feasible allocation base because Trudell recently a new controller, Christine Ericksorn installed a plantwide computer system. Trudell produces two wheel models Standard and Deluxe. Budgeted data for the upcoming year are as follows (Click the icon to view additional information.) (Click the icon to view the additional data.) For the upcoming year, Trudell's budgeted ABC manufacturing overhead allocation rates are as follows: Read the requirements (Click the icon to view the additional data.) Requirement 2. Compute the manufacturing overhead cost per wheel of each model using ABC. (Round the cost allocation base to three decimals and cost per wheel to the nearest cent.) Trudell Corporation ABC Indirect Manufacturing Cost per Unit Cost Quantity of Cost Allocation Allocated Activity Activity Allocation Rate Base Used By: Cost Per Wheel Standard Deluxe Standard Deluxe 3.50 450.00 30.00 53.00 6000 10 6000 1000 21000 4500 180000 53000 329700 8000 Materials handling Machine setup Insertion of parts Finishing Total ABC allocated indirect cost 28000 4500 240000 159000 422200 8000 3000Explanation / Answer
1) Trudell Corporation Total Budgeted Indirect Manufacturing Costs Activity Budgeted Quantity of Cost Allocation Base Activity Cost Allocation Rate Total Budgeted Indirect Cost Materials handling = (6 × 1,000) + (8 × 1,000) 14000 $3.50 $49,000.00 Machine setups = (10+10) 20 $450.00 $9,000.00 Insertion of parts = (6 × 1,000) + (8 × 1,000) 14000 $30.00 $420,000.00 Finishing =(1 x 1000) + (3 x 1000) 4000 $53.00 $212,000.00 Total budgeted indirect cost $690,000.00 2) Trudell Corporation ABC Indirect Manufacturing Cost per Unit Activity Cost Allocation Rate Quantity of Cost Allocation Base Used By: Allocated Activity Cost Per Wheel Standard Deluxe Standard Deluxe Materials handling $3.50 6 8 $21.00 $28.00 Machine setups = 10/1000 $450.00 0.01 0.01 $4.50 $4.50 Insertion of parts $30.00 6 8 $180.00 $240.00 Finishing $53.00 1 3 $53.00 $159.00 Total ABC allocated indirect cost $258.50 $431.50 3) Budgeted total manufacturing overhead (a) $690,000.00 (Part 1) Budgeted total direct labor hours= (1,000 × 2.7) + (1,000 × 3.3) (b) 6000 Plant-wide overhead allocation = (a)/(b) $115.00 per direct labor hour Manufacturing overhead cost per wheel: Standard = 2.7 x $115 $310.50 Deluxe = 3.3 x $115 $368.00