Vplus Inc. makes two styles of statuettes, Classic and Gold, and operates at capacity. Vplus does large custom orders. Vplus budgets to produce 10,000 classic statuettes and 5,000 gold statuettes. Manufacturing takes place in two production departments: forming and assembly. In the forming department, indirect manufacturing costs are accumulated in two cost pools, setup and general overhead. In the assembly department, all indirect manufacturing costs are accumulated in one general overhead cost pool. The classic statuettes are formed in batches of 200 but because of the more intricate detail of the gold statuettes, they are formed in batches of 50. The controller has asked you to compare plant-wide, department, and activity-based cost allocation. Acclaim Budgeted Information for the Year Ended November 30,2017 Forming Department Classic Gold Total Direct materials $60,000 $35,000 $95,000 Direct manufacturing labor Overhead costs 30,000 20,000 50,000 Setup 48,000 General overhead 32,000 Assembly Department Classic Gold Total Direct materials $5,000 $10,000 $15,000 Direct manufacturing labor 15,000 25,000 40,000 Overhead costs General overhead 40,000 Required Calculate the budgeted unit cost of classicand gold statuettes based on a single plant-wide overhead rate, if total overhead is allocated based on total direct costs. (Don’t forget to include direct material and direct manufacturing labor cost in your unit cost calculation.) Calculate the budgeted unit cost of classicand gold statuettes based on departmental overhead rates, where forming department overhead costs are allocated based on direct manufacturing labor costs of the forming department and assembly department overhead costs are allocated based on total direct manufacturing labor costs of the assembly department. Calculate the budgeted unit cost of classic and gold statuettes if Vplus allocates overhead costs in each department using activity-based costing, where setup costs are allocated based on number of batches and general overhead costs for each department are allocated based on direct manufacturing labor costs of each department.
Vplus Inc. makes two styles of statuettes, Classic and Gold, and operates at capacity. Vplus does large custom orders. Vplus budgets to produce 10,000 classic statuettes and 5,000 gold statuettes. Manufacturing takes place in two production departments: forming and assembly. In the forming department, indirect
The controller has asked you to compare plant-wide, department, and activity-based cost allocation.
Acclaim Budgeted Information for the Year Ended November 30,2017
Forming Department Classic Gold Total
Direct materials |
$60,000 |
$35,000 |
$95,000 |
Direct manufacturing labor Overhead costs |
30,000 |
20,000 |
50,000 |
Setup |
|
|
48,000 |
General overhead |
|
|
32,000 |
Assembly Department |
Classic |
Gold |
Total |
Direct materials |
$5,000 |
$10,000 |
$15,000 |
Direct manufacturing labor |
15,000 |
25,000 |
40,000 |
Overhead costs General overhead 40,000
Required
- Calculate the budgeted unit cost of classicand gold statuettes based on a single plant-wide overhead rate, if total overhead is allocated based on total direct costs. (Don’t forget to include direct material and direct manufacturing labor cost in your unit cost calculation.)
- Calculate the budgeted unit cost of classicand gold statuettes based on departmental overhead rates, where forming department overhead costs are allocated based on direct manufacturing labor costs of the forming department and assembly department overhead costs are allocated based on total direct manufacturing labor costs of the assembly department.
-
Calculate the budgeted unit cost of classic and gold statuettes if Vplus allocates overhead costs in each department using activity-based costing, where setup costs are allocated based on number of batches and general overhead costs for each department are allocated based on direct manufacturing labor costs of each department.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 8 images