Bus 630 week 2 assignment auerbach enterprises
MaxiFlow requires direct materials costs which total $135 per unit, while Alaska’s direct materials requirements total $110 per unit. Direct labor costs per unit are $75 for MaxiFlow and $95 for Alaska.
Auerbach Enterprises uses machine hours as the cost driver to assign overhead costs to the air conditioners. The company has used a company-wide predetermined overhead rate in past years, but the new controller, Bennie Leon, is considering the use of departmental overhead rates beginning with the next year.
Don't use plagiarized sources. Get Your Custom Essay on
Bus 630 week 2 assignment auerbach enterprises
Just from $13/Page
The following planning information is available for the next year for each the four manufacturing departments within the company:
Overhead Machine
|
Details |
Costs |
Hours |
|
Radiator parts fabrication |
$80,000 |
10,000 |
|
Radiator assembly weld and test |
100,000 |
20,000 |
|
Compressor parts fabrication |
120,000 |
5,000 |
|
Compressor assembly and test |
180,000 |
45,000 |
|
Total |
$480,000 |
80,000 |
Normally, the air conditioners are produced in batch sizes of 20 at a time. A production batch of 20 units requires the following number of hours in each department:
|
Details |
Maxi Flow |
Alaska |
|
Radiator parts fabrication |
28 |
16 |
|
Radiator assembly weld and test |
30 |
74 |
|
Compressor parts fabrication |
32 |
8 |
|
Compressor assembly and test |
26 |
66 |
|
Total |
116 |
164 |
Required:
1. Compute the departmental overhead rates using machine hours as the cost driver.
2. Compute a company-wide overhead rate using machine hours as the cost driver.
3. Compute the overhead costs per batch of MaxiFlow and Alaska assuming:
(a) The company-wide rate.
(b) The departmental rates.
4. Compute the total costs per unit of MaxiFlow and Alaska assuming:
(a) The company-wide rate.
(b) The departmental rates.
5. Is one product affected more than the other by use of departmental rates rather than a company-wide
rate? Why or why not?
Calculator
Our features
We've got everything to become your favourite writing service
Money back guarantee
Your money is safe. Even if we fail to satisfy your expectations, you can always request a refund and get your money back.
Confidentiality
We don’t share your private information with anyone. What happens on our website stays on our website.
Our service is legit
We provide you with a sample paper on the topic you need, and this kind of academic assistance is perfectly legitimate.
Get a plagiarism-free paper
We check every paper with our plagiarism-detection software, so you get a unique paper written for your particular purposes.
We can help with urgent tasks
Need a paper tomorrow? We can write it even while you’re sleeping. Place an order now and get your paper in 8 hours.
Pay a fair price
Our prices depend on urgency. If you want a cheap essay, place your order in advance. Our prices start from $11 per page.