Q.Calculate the budgeted unit cost of basic and deluxe trophies 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. Acclaim Inc. makes two styles of trophies, basicand deluxe, and operates at capacity. ACciam does iarge custom orders. Acclaim budgets to produce10,000 basic trophies and 5,000 deluxe trophies. Manufacturing takes place in two production departments:forming and assembly. In the forming department, indirect manufacturing costs are accumulated in twocost pools, setup and general overhead. In the assembly department, all indirect manufacturing costs areaccumulated in one general overhead cost pool. The basic trophies are formed in batches of 200 but be-cause of the more intricate detail of the deluxe trophies, they are formed in batches of 50.The controller has asked you to compare plant-wide, department, and activity-based cost allocation.Acclaim Budgeted Intormation for the Year Ended November 30, 2017Forming DepartmentBasicS60,00030,000Deluxe$35,00020,000Total$95,00050,000Direct materialsDirect manufacturing laborOverhead costsSetup48,00032,000General overheadAssembly DepartmentTotal$15,000Basic$5,00015,000DeluxeDirect materials$10,00025,000Direct manufacturing labor40,000Overhead costsGeneral overhead40,000

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FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Publisher:Libby

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Q.Calculate the budgeted unit cost of basic and deluxe trophies 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.

Acclaim Inc. makes two styles of trophies, basic
and deluxe, and operates at capacity. ACciam does iarge custom orders. Acclaim budgets to produce
10,000 basic trophies and 5,000 deluxe trophies. 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 basic trophies are formed in batches of 200 but be-
cause of the more intricate detail of the deluxe trophies, they are formed in batches of 50.
The controller has asked you to compare plant-wide, department, and activity-based cost allocation.
Acclaim Budgeted Intormation for the Year Ended November 30, 2017
Forming Department
Basic
S60,000
30,000
Deluxe
$35,000
20,000
Total
$95,000
50,000
Direct materials
Direct manufacturing labor
Overhead costs
Setup
48,000
32,000
General overhead
Assembly Department
Total
$15,000
Basic
$5,000
15,000
Deluxe
Direct materials
$10,000
25,000
Direct manufacturing labor
40,000
Overhead costs
General overhead
40,000

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