Tristar Manufacturing produces two types of batteryoperated

Tristar Manufacturing produces two types of battery-operated toy soldiers: infantry and special forces. The soldiers are produced by using one contnuous process. Four activities have been identified: machining. setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows Product Machine Hours Setups Receiving Orders Packing Orders 20,600 360 120 810 ntantry Special Forces 20,600 Costs 1,500 750 27,900 90 $98,880$29,184 $15,930 Required: 1. Calcuiate the total overhead assigned to each product by using only machine hours to calculate a plantwide rate. (Round overnead rate answer to two decimal places and other answers to the nearest dollar) 2 Caicuiste consumption ratios for esch activity (Round to two decimai places 3. Calculate a rate for each activity by using the associated driver. (Round to two decimal places.) decimai pieces) for each driver. (Round to two decimal places,) 4 Assign the overmead costs to each product by using the actvity rates computed in Requirement 3 Assign the the actvity rares 5. CONCEPTUAL CONNECTION Comment on the difference between the assignment in Requiremen! 1 and the activity-based assignment

Solution

Answer 1. Amount Machining                     98,880.00 Setups                     29,184.00 Receiving Orders                     15,930.00 Packing Orders                     27,900.00 Total Overheads                   171,894.00 Total Machine hours = 20,600 + 20,600 = 41,200 Mach hrs. Plantwide Overhead Rate = $171,894 (Total Overhead) / 41,200 Mach. Hrs (Allocation Base) Plantwide Overhead Rate = $4.17 per mach. Hrs. (Approx.) Overhead Assigned to Infantry Product = 20,600 Mach Hrs X $4.17 = $85,947 Overhead Assigned to Special Forces Product = 20,600 Mach Hrs X $4.17 = $85,947 Answer 2. Overhead Activity Consumption Ratio Infantry Special Forces Machining                                0.50                                   0.50 (20,600 / 41,200) (20,600 / 41,200) Setups                                0.75                                   0.25 (360 / 480) (120 / 480) Receiving                                0.90                                   0.10 (810 / 900) (90 / 900) Packing                                0.67                                   0.33 (1,500 / 2,250) (750 / 2,250) Answer 3. Activity Overhead Cost Driver Quantity Allocation Rate Indirect Costs Machining                           98,880                              41,200 Mach hrs                               2.40 Per Mach hr Setups                           29,184                                    480 setups                             60.80 per setup Receiving                           15,930                                    900 Receiving orders                             17.70 per Receiving order Packing                           27,900                                 2,250 Packing Orders                             12.40 per Packing Order Total                         171,894 Answer 4. Assigning Overhead Cost to Product Model Using ABC Method Activity Based Overhead Rate Infantry Special Forces Cost Driver Incurred OH Allocated Cost Driver Incurred OH Allocated Machining                                2.40 Per Mach hr                       20,600 Mach hrs                         49,440.00             20,600 Mach hrs             49,440.00 Setups                              60.80 per setup                             360 setups                         21,888.00                   120 setups                7,296.00 Receiving                              17.70 per Receiving order                             810 Receiving orders                         14,337.00                      90 Receiving orders                1,593.00 Packing                              12.40 per Packing Order                         1,500 Packing Orders                         18,600.00                   750 Packing Orders                9,300.00 Total Indirect Cost                       104,265.00             67,629.00 Answer 5. Infantry Special Forces Overhead Assigned: As per Traditional Costing                     85,947.00                        85,947.00 As per Activity Costing                   104,265.00                        67,629.00 Difference                   (18,318.00)                        18,318.00