Compute the allocation rate that was used for the manufacturing overhead in Exhibits 2 and 3. Show your computations in enough detail and with enough organization to make them easy to follow. Exhibit 2
Exhibit 3
Question 2 (8 points) Using the rates from Question 1, show the computations that were used for allocating manufacturing overhead in Exhibit 2 and Exhibit 3. Show your computations in enough detail and with enough organization to make them easy to follow.
Machine made Hand made Exhibit 2
Exhibit 3
Question 3. (10 points) Assuming that all manufacturing overhead is fixed and all units produced are sold, calculate the breakeven (in units and $) for machine made and hand made shoes
based on Exhibit 2? Is this information useful for decision making (one sentence only)?
Machine made shoes: Breakeven units:
Breakeven $:
Hand made shoes: Breakeven units:
Breakeven $:
Question 4. (10 points) Using the same logic, calculate the breakeven (in units and $) for machine made and hand made shoes
based on Exhibit 3? Is this information useful for decision making?
Machine made shoes: Breakeven units:
Breakeven $:
Hand made shoes: Breakeven units:
Breakeven $:
Question 5. (11 points) Using the same logic, calculate the breakeven (in units and $) for Bally, Inc.
based on Exhibit 2? Is this information useful for decision making?
Breakeven units:
Breakeven $:
Question 6. (15 points) use the information in Exhibit 1 to identify the cost drivers and compute manufacturing overhead rates for the machine maintenance, machine set up labor, and material handling. MOH Item Total Cost Cost Driver MOH Rate
Machine maintenance
Machine set up labor
Material handling
Question 7. (20 points) Use the overhead rates you computed in Question 6 to calculate the cost of goods manufactured for a pair of machine made shoes and a pair of hand made shoes, and compute the margin percentages for each. Explain your computations for MOH.
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ACCT 331 exam….doc