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Check my work mode : This shows whet is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question 3 Kitchen Kings toledo plant mamutacturethree Procct nsel mot-tu product models are the Regufar (REG), the Advanced AD), and the Gourmet (GMT). Until recently, the plant used a ob-order product-costing system. with manufacturing overhead all mult-butnec cerarnc cookto plant's three applied on the basis of ditional costing system was based. Planned annual production Volume in units Production runs 2e cuns of 5e units runs of 125 units 2 points Direct material 9 setup) (not including per product unit by product line in a year Machine houns (H) Total machine hours consumed 48,0ae 7 MH 1, 000) is $12 per The annual budgeted overnead is s1224000, and the company's predetertmaned overhead rate is s2 per reported under the plants traditional costing system borhour The procust costs for the thtee product models as r are shown ini the following table Direct moterial Direct labor (not including set-up Kitchen King's pncing policy is to set a target price for each product equal to 130 percent of the full product cost Due to price competition from other appliance manufachirers REG uhits were selling at $525. and ADV units were selling for $628. These prices were somewhat below the firm's target prices. However these results were partially offset by greater-than-expected profits on the GMT product ine. Mänagement had raised the price on the GMT model to $800, which was higher than the original target price. Even at this pice, Kitchen King's customers did not seem to hesitate to place orders Moreover the company's competitors did not mount a challenge in the market fon the GMT product line Nevertheless. concern contihued to mount in Toledo about the difficulty in the REG a markets Ater al, these were the plamts preed and-butter products, with projected annual sales of 5,000 REG units nd ADV and 4.000 ADV of 7lNext O Type here to search

Answer 1

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Activity	Activity Pool	Cost driver	Cost driver Quantity	Pool Rate	Product Line	Cost Driver Quantity for	Activity Cost for	Product Line	Activity Cost per
						Product Line	Product Line	Production Vol	Unit of Product
	A		B	C=A/B		D	E=D*C	F	E/F
Machine Related	$      310,500	Machine Hours	115,000	$       2.70	REG	50,000	$             135,000	5,000	$                 27.00
					ADV	48,000	$             129,600	4,000	$                 32.40
					GMT	17,000	$               45,900	1,000	$                 45.90
					Total	115,000	$             310,500
Material Handling	$        52,500	Production Runs	100	$   525.00	REG	40	$               21,000	5,000	$                   4.20
					ADV	40	$               21,000	4,000	$                   5.25
					GMT	20	$               10,500	1,000	$                 10.50
					Total	100	$               52,500
Purchasing	$        75,000	Purchase Orders	300	$   250.00	REG	100	$               25,000	5,000	$                   5.00
					ADV	96	$               24,000	4,000	$                   6.00
					GMT	104	$               26,000	1,000	$                 26.00
					Total	300	$               75,000
Setup	$        85,000	Production Runs	100	$   850.00	REG	40	$               34,000	5,000	$                   6.80
					ADV	40	$               34,000	4,000	$                   8.50
					GMT	20	$               17,000	1,000	$                 17.00
					Total	100	$               85,000
Inpection	$        27,500	Inspection Hours	1,100	$     25.00	REG	400	$               10,000	5,000	$                   2.00
					ADV	400	$               10,000	4,000	$                   2.50
					GMT	300	$                 7,500	1,000	$                   7.50
					Total	1,100	$               27,500
Shipping	$        66,000	Shipments	1,100	$     60.00	REG	500	$               30,000	5,000	$                   6.00
					ADV	400	$               24,000	4,000	$                   6.00
					GMT	200	$               12,000	1,000	$                 12.00
					Total	1,100	$               66,000
Engineering	$        32,500	Engineering Hours	650	$     50.00	REG	250	$               12,500	5,000	$                   2.50
					ADV	200	$               10,000	4,000	$                   2.50
					GMT	200	$               10,000	1,000	$                 10.00
					Total	650	$               32,500
Facility	$      575,000	Machine Hours	115,000	$       5.00	REG	50,000	$             250,000	5,000	$                 50.00
					ADV	48,000	$             240,000	4,000	$                 60.00
					GMT	17,000	$               85,000	1,000	$                 85.00
					Total	115,000	$             575,000