Activity Allocation Base Predetermined Overhead Allocation Rate Materials handling Number of parts $8.00 per part Machine setup Number of setups 800.00 per setup Insertion of parts Number of parts 28.00 per part Finishing Number of finishing hours 60.00 per hour   Standard Deluxe Parts per rim 8.0 9.0 Setups per 500 rims 12.0 12.0 Finishing hours per rim 2.0 4.5 Total direct labor hours per rim 6.0 9.0 Company manufactures wheel rims. The controller expects the following ABC allocation rates for 2024​: LOADING... ​(Click the icon to view the allocation​ rates.) Elkin produces two wheel rim​ models: standard and deluxe. Expected data for 2024 Part 1  The company expects to produce 500 units of each model during the year. Requirement 1. Compute the total estimated indirect manufacturing cost for 2024.   Begin by selecting the formula to compute the total estimated overhead​ (OH) costs.             Total estimated   ×   = overhead costs Part 2 Now compute the total estimated indirect manufacturing cost for 2024.       Total Estimated Activity   Indirect Manufacturing Cost Materials handling     Machine setup     Insertion of parts     Finishing     Total estimated indirect manufacturing cost     Part 3 Requirement 2. Prior to 2024​, Elkin used a single plantwide overhead allocation rate system with direct labor hours as the allocation base. Compute the predetermined overhead allocation rate based on direct labor hours for 2024. Use this rate to determine the estimated indirect manufacturing cost per wheel rim for each​ model, to the nearest cent.   ​First, select the​ formula, and then enter the amounts to compute the allocation rate.       ÷   = Allocation rate     ÷   =   Part 4 Use the single plantwide allocation rate to determine the indirect manufacturing cost per wheel rim for each​ model, to the nearest cent.   Indirect manufacturing cost per rim: Standard model:   Deluxe model:   Part 5 Requirement 3. Compute the estimated ABC indirect manufacturing cost per unit of each model for 2024. Carry each cost per unit to the nearest cent.   Compute the costs per unit for the standard model​ first, then the deluxe model. ​(Carry the setup cost per rim to three decimal places. Round your final answers to the nearest​ cent.)       Allocated Mfg. Activity   OH Cost Per Rim     Standard Materials handling     Machine setup     Insertion of parts     Finishing     Total indirect cost per rim       Allocated Mfg.   OH Cost Per Rim   Deluxe

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Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.