Question

Padfolio Club makes two products (Padfolios and Business Cards) for students to use during interview season. The company has two production departments (Forming and Assembly) and operates at capacity. The controller has asked you to compare plant-wide, department, and activity-based cost allocation. Direct Material and Direct Labor is incurred in both production departments (Forming & Assembly) and is directly traced to the two product lines (Padfolios & Business Cards). There are also two types of overhead (Setup & Supervision) incurred in the departments. Overhead costs need to be allocated to the two product lines so the Quinnipiac Padfolio Club can calculate the costs of each product line. Budgeted information for the vear ended December 31, 2017 is as follows: Forming Department Direct Materials Direct Manufacturing Labor Overhead Costs Setup Supervision $ $ Padfolios Business Cards 1 25,000 $ 24,000 $ 41,000 $ 17,000 $ Total 49,000 58,000 $ $ 22,500 20,500 Assembly Department Direct Materials Direct Manufacturing Labor Overhead Costs Setup $ $ Padfolios Business Cards 4,500 $ 20,000 $ 17,500 $ 22,000 $ Total 24,500 39,500 $ $ 50,000 24,000 Supervision Other information about the departments activities follows: Setup costs in each department vary with the number of batches processed in each department. The budgeted number of batches for each product line in each department is as follows: Padfolios Setup Batches Forming Department Assembly Department Business Cards Total 1201 90133 28 43 148 Supervision Costs: Vary with direct manufacturing labor costs in each department. Calculate the total budgeted cost of each product line (Padfolios vs. Business Cards) based on a single plant-wide overhead rate, if total overhead is allocated based on total direct costs. (Direct costs should be traced to the products as identified above. Indirect costs should be allocated to the products based on a single overhead allocation rate.) OH Pool Description OH PoolAmount Budeeted Overhead Rate OH Rate 1 Alloc Base Amount Allocation Rate Alloc Base Description Total Costs Assiened Padfolios Business Cards Total Total Direct Costs $ 88,000 $ 83,000 $ 171,000 Total Overhead Costs Total Manufacturing Costs $ $ 45,546 $ 133,546 $ 71,454 $ 154,454 $ 171,000 288,000

2	Calculate the budgeted cost of each product line (Padfolios vs. Business Cards) based on departmental overhead rates, where: (a) Forming department overhead costs are allocated based on direct manufacturing labor costs of the forming department, and (b) Assembly department overhead costs are allocated based on total direct costs of the assembly department.
	(Direct costs should be traced to the products as identified above. Indirect costs should be allocated to the products based on two overhead allocation rates -- one for each department.)
	Budgeted Overhead Rate	OH Pool Description	OH Pool Amount	Alloc Base Amount	Allocation Rate	Alloc Base Description
	OH Rate 1
	OH Rate 2
	Total Costs Assigned		Padfolios	Business Cards	Total
	Total Direct Costs
	Total Overhead Costs
	Total Manufacturing Costs

I need the Overhead Costs and Total Manufacturing Costs for number 2

1. Calculation of Budgeted overhead rate per product in each department
Forming Department	Total	Padfolios	Business Cards
Set up Cost	$22,500	$4,257	$18,243
Supervision Cost	$20,500	$14,491	$6,009
Basis for the allocation of overhead cost in Forming Dept
Product	Set up Batches	Direct Labour
Padfolios	28	$41,000
Business Cards	120	$17,000
Total	148	$58,000
Assembly Department	Total	Padfolios	Business Cards
Set up Cost	$50,000	$16,165	$33,835
Supervision Cost	$24,000	$10,633	$13,367
Basis for the allocation of overhead cost in Forming Dept
Product	Set up Batches	Direct Labour
Padfolios	43	$17,500
Business Cards	90	$22,000
Total	133	$39,500
2. Calculation of Budgeted cost of each Product
Cost Assigned	Padfolios	Business Cards	Total
Forming Department
Direct Marterials	$25,000	$24,000	$49,000
Direct Labour	$41,000	$17,000	$58,000
Assembly Department
Direct Marterials	$4,500	$20,000	$24,500
Direct Labour	$17,500	$22,000	$39,500
Total Direct Cost	$88,000	$83,000	$1,71,000
Forming Department
Set up Cost	$4,257	$18,243	$22,500
Supervision Cost	$14,491	$6,009	$20,500
Assembly Department
Set up Cost	$16,165	$33,835	$50,000
Supervision Cost	$10,633	$13,367	$24,000
Total Overhead Cost	$45,546	$71,454	$1,17,000
Total Manufacuring Cost	$1,33,546	$1,54,454	$2,88,000

Answer 1

1.A)

		Department
	Overhead	Forming	Assembly	Total
	Setup	22,500	50,000	72,500
	Supervision	20,500	24,000	44,500
	Total	43,000	74,000	117,000
		Department
		Forming	Assembly	Total
	Direct Manufacturing Labor	58,000	39,500	97,500
	Plant Wide Overhead Rate
	=Total Overhead / Total DML
	= 117,000/97,500			1.20
1)	Budgeted Cost of Production
		Padfolois	Business cards	Total
	Direct Material
	Forming	25,000	24,000	49,000
	Assembly	4,500	20,000	24,500
		29,500	44,000	73,500
	Direct Labor
	Forming	41,000	17,000	58,000
	Assembly	17,500	22,000	39,500
		58,500	39,000	97,500
	Applied Overhead	70,200	46,800	117,000
	= Direct Labor x 1.2
	Total Budgeted Cost	158,200	129,800	288,000

Total Budgeted Cost = $ 288,000