# me with Req 4. If someone can me I will give a thumbs up! :) Transcribed Image Text: Reg 1A Reg 18 Req 24 Reg 28 Req 20 Reg 3A

me with Req 4. If someone can me I will give a thumbs up! ðŸ™‚ Transcribed Image Text: Reg 1A
Reg 18
Req 24
Reg 28
Req 20
Reg 3A
Reg 38
Reg 30
Reg 4
Reg s
Using your departmental overhead cost alocations, redo the controller’s segmented income statement (continue to allocate
selling and administrative expenses based on sales dollars). (Round your intermediate calculations to 2 decimal places.)
Basic
Sales
3.000.000
Cost of goods sokd
Gross margin
2,000,000
2.204.000 O1445.500 O
564.500 O
564,500 O
720.000 O 400.000 O
S 75.400S 74.500
795,400 O
Nat aperating income
74,500 O
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Reg 18
Reg 2A
Reg 28
Reg 20
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Reg 38
Reg 30
Reg 4
Reg 5
Calculate an activity rate for each activity cost pool. (Round your answers to 2 decimal places.)
Activity Cost Pool Activity Rate
s 18.0n per
Machining
Assemble and
pack
lOrder processing
18.98
per
9.42 O
DLH
920.00
per
order
Setups
per
S 523.08 O
hour
Reg 1A
Reg 18
Reg 2A
Reg 28
Reg 20
Reg 3A
Reg 38
Reg 3C
Reg 4
Reg 5
Calculate the total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-
based approach. (Round your intermediate calculations to 2 decimal places.)
Basic
Machining
Assemble and pack
\$ 227,760 OS 189,800 O
188,400 O
46,000 O
94,200 O
184,000 O
Order processing
Setups
assigned
26,154 O
313,848 O
Is
488,314
Is 781,848
Reg 1A
Reg 18
Req 2A
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Req 3A
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Req 30
Reg 4
Req 5
Calculate the total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based
Ð°pproach.
Basic
cost
\$ 300,000 Os 400,000
O
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Reg 4
Req 5
Using your activity-based cost assignments from requirement 3, prepare a contribution format segmented income statement
that is adapted from Exhibit 6-8. (nt: Organize all of the company’s costs Into three categorles: varlable expenses, traceable
fixed expenses, and common flxed expenses.) (Round your Intermediate calculations to 2 decimal places.)
Show less A
Koontz Company
Income statement
Total
Basic
Sales
Os 3,000,000 8 \$ 2,000,000 O S 5,000,000
Variable expenses:
Direct materials
1,400,000
800,000 0
600,000 O
150,000 O
600,000 O
300,000 8
200,000 O
Direct labor
900,000
350,000 O
Total variable expenses
1,550,000 0
1,450,000 8
1,100,000
2,650,000
Contribution margin
900,000
2,350,000
Traceable fixed expenses:
1,270,162 0
488,314 8
150,000 8
781,848 8
200,000
350,000 8
Total traceable fixed expenses
Segment margin
638,314 O
729,838 Os
981,848
1,620,162
\$ (81,848)
\$ 729,838
Common fixed expenses:
Other
580,000
Total common fixed expenses
580,000
Net operating income
149,838 Transcribed Image Text: 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
20,000
10,000
Total
30,000
Number of units produced and sold
\$ 5,000,000
3,658, 000
Sales
Cost of goods sold
Gross margin
\$3,e00, e00
2,300,000
700,000
720,000
\$ (20,000) S 170,eee
\$2, e00, e00
1,350,000
650,000
1.350.000
480.000
1,200, e0e
Net operating incone (loss)
Direct laborers are paid \$20 per hour. Direct materials cost \$40 per unit for the Basic model and \$60 per unit for the Advanced model.
Koontz is considering a change from plantwide overhead allocation to a departmental approach. The overhead costs in the company’s
Molding Department would be allocated based on machine-hours and the overhead costs in its Assemble and Pack Department would
be allocated based on direct labor-hours. To enable further analysis, the controller gathered the following information:
Assenble
Moldine
and Pack
S 787,500
Total
\$ 562, 5ee \$1,350, eee
Direct labor hours:
Basie
10,000
5,000
20, 000
10,000
30, e00
15,000
Machine hours:
Basic
12,000
10,000
12,000
10,000
Required:
1. Using the plantwide approach:
a. Calculate the plantwide overhead rate.
b. Calculate the amount of overhead that would be assigned to each product.
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 has suggested using activity-based costing instead of either the plantwide or departmental
approaches. To facilitate the necessary calculations, she assigned the company’s total manufacturing overhead cost to five activity
cost pools as follows:
Manufacturing
Activity Cost Pool
Machining
Assemble and pack
Order processing
Setups
Other (unused capacity)
Activity Measure
Machine-hours in Molding
\$ 417,500
Direct labor-hours in Assemble and Pack
282.500
Number of customer orders
230, 000
Setup hours
340.000
se,000
\$1,350,000
She also determined that the average order size for the Basic and Advanced models is 400 units and 50 units, respectively. The
molding machines require a setup for each order. One setup hour is required for each customer order of the Basic model and three
hours are required to setup for an order of the Advanced model.
The company pays a sales commissions of 5% for the Basic model and 10% for the Advanced model. Its traceable fixed advertising
costs include \$150,000 for the Basic model and \$200,000 for the Advanced model. The remainder of the company’s selling and
administrative costs are organization-sustaining in nature.
Using the additional information provided by the production manager, calculate:
a. An activity rate for each activity cost pool.
b. The total manufacturing overhead cost allocated to the Basic model and the Advanced model using the activity-based approach.
c. The total selling and administrative cost traced to the Basic model and the Advanced model using the activity-based approach.
4. Using your activity-based cost assignments from requirement 3, prepare a contribution format segmented income statement that is
adapted from Exhibit 6-8. (nt: Organize all of the company’s costs into three categories: variable expenses, traceable fixed expenses.
and common fixed expenses)
5. Using your contribution format segmented income statement from requirement 4, calculate the break-even point in dollar sales for
Reg 1A
Reg 1B
Reg 2A
Reg 28
Reg 20
Reg 3A
Reg 38
Reg 30
Reg 4
Reg 5
rate
30 O BUH
DLH
Reg 1A
Reg 18
Reg 2A
Reg 28
Req 20
Req 3A
Reg 38
Reg 30
Reg 4
Reg 5
Calculate the amount of overhead that would be assigned to each product.
Basic
Amount of
900,000 Os 450,000 O
Reg 1A
Reg 18
Req 2A
Reg 28
Reg 20
Req 3A
Req 38
Reg 30
Reg 4
Reg 5
Molding
Assemble and
Pack Department
s 18.75 O DLH
Molding
Department
rate
\$ 35.80 O MH
per
Reg 1A
Reg 18
Reg 2A
Reg 28
Reg 20
Req 3A
Reg 38
Reg 3C
Reg 4
Reg S
Calculate the total amount of overhead that would be assigned to each product. (Round your intermediate calculations to 2
decimal places.)
Basic
Molding Department
\$ 429,600 O S 358,000 O
Assemble and Pack Department