I need the answer to 2.B-3. ### 2. Using a Departmental Approach:a. **Calculate the Departmental Overhead Rates.** b. **Calculate the Total Amount of Overhead that would be Assigned to Each Product.** c. **Using your Departmental Overhead Cost Allocations, redo the Controller’s Segmented Income Statement (continue to allocate selling and administrative expenses based on sales dollars).**### 3. Koontz's Production Manager Suggestion:The production manager proposed using activity-based costing (ABC) instead of the plantwide or departmental approaches. The company’s total manufacturing overhead cost is allocated to five activity cost pools:| Activity Cost Pool | Activity Measure | Manufacturing Overhead ||-----------------------|-------------------------------------|------------------------|| Machining | Machine-hours in Molding | $417,500 || Assemble and Pack | Direct Labor-hours in Assemble and Pack | $282,500 || Order Processing | Number of Customer Orders | $230,000 || Setups | Setup Hours | $340,000 || Other (Unused Capacity) | | $80,000 || **Total** | | **$1,350,000** |Additional insights include:- The average order size for the Basic and Advanced models is 400 units and 50 units, respectively.- Molding machines require a setup for each order.- One setup hour is needed for each customer order of the Basic model; three hours are needed for the Advanced model.- Sales commissions are 5% for the Basic model and 10% for the Advanced model.- Traceable fixed advertising costs are $150,000 for the Basic model and $200,000 for the Advanced model.- Remaining selling and administrative costs are organization-sustaining in nature.### Calculations:Using the additional information, perform the following calculations:a. **Activity Rate for Each Activity Cost Pool.** b. **Total Manufacturing Overhead Cost Allocated to the Basic Model and the Advanced Model using the Activity-Based Approach.** c. **Total Selling and Administrative Cost Traced to the Basic Model and the Advanced Model using the Activity-Based Approach.** ### Koontz Company Production and Financial AnalysisKoontz Company manufactures two models of industrial components: a Basic model and an Advanced model. The company's manufacturing overhead is considered fixed and is allocated using plantwide rates based on direct labor-hours. Below is the segmented income statement provided for the recent year, withholding the allocation of selling and administrative expenses based on sales dollars.**Income Statement:**| | Basic | Advanced | Total ||--------------------------|-----------------|----------------|----------------|| Number of units produced and sold | 20,000 | 10,000 | 30,000 || Sales | $3,000,000 | $2,000,000 | $5,000,000 || Cost of goods sold | 2,300,000 | 1,350,000 | 3,650,000 || **Gross margin** | **700,000** | **650,000** | **1,350,000** || Selling and administrative expenses | 720,000 | 480,000 | 1,200,000 || **Net operating income (loss)** | **$(20,000)** | **170,000** | **150,000** |**Labor and Material Costs:**- Direct laborers are paid $20 per hour.- Direct materials cost: - Basic model: $40 per unit - Advanced model: $60 per unit**Overhead Allocation:**Koontz is evaluating a shift from plantwide overhead allocation to a departmental approach. This involves:- Allocating overhead in the Molding Department based on machine-hours.- Allocating overhead in the Assemble and Pack Department based on direct labor-hours.The following data was compiled for further analysis:**Departmental Overhead and Labor Information:**| | Molding | Assemble and Pack | Total ||--------------------------|----------------|-------------------|----------------|| Manufacturing overhead costs | $787,500 | $562,500 | $1,350,000 || **Direct labor hours:** | | | || - Basic | 10,000 | 20,000 | 30,000 || - Advanced | 5,000 | 10,000 | 15,000

Overhead costs are expenses incurred by a company that are not directly related to the creation or…

Koontz Company manufactures two models of industrial components-a Basic model and an Advanced Model. The company considers all of its manufacturing overhead costs to be fixed and it uses plantwide manufacturing overhead cost allocation based on direct labor-hours. Koontz's controller prepared the segmented income statement that is shown below for the most recent year (he allocated selling and administrative expenses to products based on sales dollars): Basic Advanced Total Number of units produced and sold 20,000 10,000 30,000 Sales $3,000,000 $2,000,000 $ 5,000,000 Cost of goods sold Gross margin Selling and administrative expenses 2,300,000 1,350,000 700,000 720,000 650,000 480,000 3,650,000 1,350,000 1,200,000 Net operating income (loss) $ (20,000) $ 170,000 $ 150, е00

Koontz Company manufactures two models of industrial components-a Basic model and an Advanced Model. The company considers all of its manufacturing overhead costs to be fixed and it uses plantwide manufacturing overhead cost allocation based on direct labor-hours. Koontz's controller prepared the segmented income statement that is shown below for the most recent year (he allocated selling and administrative expenses to products based on sales dollars): Basic Advanced Total Number of units produced and sold 20,000 10,000 30,000 Sales $3,000,000 $2,000,000 $ 5,000,000 Cost of goods sold Gross margin Selling and administrative expenses 2,300,000 1,350,000 700,000 720,000 650,000 480,000 3,650,000 1,350,000 1,200,000 Net operating income (loss) $ (20,000) $ 170,000 $ 150, е00

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

What is The NPV for Machine B=
c.Why the IPSASB developed the IPSASs? d.What are the scopes of the IPSASs?
Required information [The following information applies to the questions displayed below.] Consider the following narrative describing the process of filling a customer's order at a Starbucks branch: Identify the start and end events and the activities in the following narrative, and then draw the business process model using BPMN: the Starbucks customer entered the drive-through lane and stopped to review the menu. He then ordered a Venti coffee of the day and a blueberry muffin from the barista. The barista recorded the order in the cash register. While the customer drove to the window, the barista filled a Venti cup with coffee, put a lid on it, and retrieved the muffin from the pastry case and placed it in a bag. The barista handed the bag with the muffin and the hot coffee to the customer. The customer has an option to pay with cash, credit card, or Starbucks gift card. The customer paid with a gift card. The barista recorded the payment and returned the card along with the…
Can you make QBI easier to understand? Can you say what the steps are?
3) What are the functions of FASB, GASB and FASAB? Explain
What is a double-entry? Give an example?
provide answer with explantion
what are the solutions for questions 4 & 5?
What does the IAS 2 explains?
please answer this which is part C
explain the fill answer
What does the concept "substance over form" stand for? Can you provide me with some examples?