I NEED HELP WITH REQUIREMENT 2: Mariposa, Inc., produces machine tools and currently uses a plantwide overhead rate, based on machine hours. Harry Whipple, the plant manager, has heard that departmental overhead rates can offer significantly better cost assignments than can a plantwide rate. Mariposa has the following data for its two departments for the coming year: Department A Department B Overhead costs (expected) $528,000 $132,000 Normal activity (machine hours) 110,000 55,000 Required: 1. Compute a predetermined overhead rate for the plant as a whole based on machine hours. $fill in the blank 1 per machine hour 4 2. Compute predetermined overhead rates for each department using machine hours. Round your answers to one decimal place. Department A 4.8 Department B 2.4 3. Suppose that a machine tool (Product X75) used 60 machine hours from Department A and 140 machine hours from Department B. A second machine tool (Product Y15) used 140 machine hours from Department A and 60 machine hours from Department B. Compute the overhead cost assigned to each product using the plantwide rate computed in Requirement 1. Product X75 Product Y15 Plantwide: 800 800 Repeat the computation using the departmental rates found in Requirement 2. Product X75 Product
I NEED HELP WITH REQUIREMENT 2:
Mariposa, Inc., produces machine tools and currently uses a plantwide
| Department A | Department B | |
| Overhead costs (expected) | $528,000 | $132,000 |
| Normal activity (machine hours) | 110,000 | 55,000 |
Required:
1. Compute a predetermined overhead rate for the plant as a whole based on machine hours.
$fill in the blank 1 per machine hour
4
2. Compute predetermined overhead rates for each department using machine hours. Round your answers to one decimal place.
| Department A | 4.8 |
| Department B | 2.4 |
3. Suppose that a machine tool (Product X75) used 60 machine hours from Department A and 140 machine hours from Department B. A second machine tool (Product Y15) used 140 machine hours from Department A and 60 machine hours from Department B. Compute the overhead cost assigned to each product using the plantwide rate computed in Requirement 1.
| Product X75 | Product Y15 | |
| Plantwide: | 800 | 800 |
Repeat the computation using the departmental rates found in Requirement 2.
| Product X75 | Product Y15 | |
| Departmental: | $fill in the blank 6 | $fill in the blank 7 |
Which of the two approaches gives the fairest assignment?
4. Repeat Requirement 3 assuming the expected overhead cost for Department B is $264,000.
| Product X75 | Product Y15 | |
| Plantwide: | $fill in the blank 9 | $fill in the blank 10 |
| Departmental: | $fill in the blank 11 | $fill in the blank 12 |
Would you recommend departmental rates over a plantwide rate?
Step by step
Solved in 3 steps
