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

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Q.Calculate the budgeted unit cost of basic and deluxe trophies if Acclaim 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.

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
Transcribed Image Text: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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