Question

Coupe Cabin (CC) designs and produces automotive parts. In 2017, actual manufacturing overhead is $307,800. CC's simple costing system allocates manufacturing overhead to its three customers based on machine-hours and prices its contracts based on full costs. One of its customers has regularly complained of being charged noncompetitive prices, so CC's controller Declan Gilbert realizes that it is time to examine the consumption of overhead resources more closely. He knows that there are three main departments that consume overhead resources: design, production, and engineering. Interviews with the department personnel and examination of time records yield the following detailed information: (Click the icon to view the information.) Read the requirements.

Answer 1

Given data that page 1 Coupe cabin designs and produces Automative paghtsIn 2014 Actual manu facturing oveshead is $ 304,800 · Wpis simple costing system Allocates manufacturing oveghead to its theee costumegts based on machine - house and prices its contgacts based on full costs: one of its customess has spegularly

Cor: 2 Complained of being changed non competitive patice oso coupe cabine cels controlley Deon huntes jealizes that it is time to examine the consumption of oveghead Resous ces moste closely. He knows that thesje agje thee main depastments that consume oves head Resougces: design Poduction Engineesying Intesquiews with the depasjtment pestsonnel and Examination of time secosydd yield the following detailed Infogmation: Requisments: 1) Compute the Manu-factusting oveghead allocated to each costumes in 2014 using the simple costing system that uses machine - house as the Alloca tion base. Deteg mine the fog mula needed to calculate Ovesybead using the simple costing method and then calculate LED cc's manufactusping

page 3 Ovesy head gjate 301,800 3.800 81.00 peon mac hodie Calculate the oves head allocated to each costumery using simple costing method: Machine ovest head compute the manufacturing Oves head allocated to each costumes in 2014. Using the simple costing system that uses machine - houeja as the Allocation base. Compute the manufacturing oveshead Allocated to each costumes in 2014 using depas tment - based manufactusing oveghead Rates: Q. Which costumesys do you thinks was complaining about being ovegchanged in the simple system? If the new depasitment - based gates are used to police conteacts, which customego will be unhappy ? How would you yespond to these concesins? How else might ce use the infogmation available from its department - by - department

Page Ч 3. Analysis of manufacturing oveghead costs? KAIPCC'S managegja agje wondegging if they should fugthesefine the department - by- depay tment costing system into an ABC gSystem by identifying diffegjent activities within each depast ment: Undest what conditions would it not be wooth while to fugthegi Define the departmen Costing system into an ABC system? 4 and poyo duces Automotive pasts. In 2014 Actual manufactusing oves head is $304,800 · EC's simple costing system customeals based on machine houses and prices its cont sfacts based on full costs. One of its customejs data table usage of cost doivega by custome contract united Aegan 5. Motoss Island Auto manufacturing oveghead in 2014 39,000 33,200 235,600 45 depastim ent cost delivery design CAD-

pages design - houps Engineesying . houga poloduction Machine - bougls Total 1950 50 219 150 29550 19100 307,800