Comparing ABC and Plantwide Overhead Cost Assignments

Wellington Chocolate Company uses activity-based costing (ABC). The controller identified two activities and their budgeted costs:

Setting up equipment $432,000
Other overhead $1,440,000
Setting up equipment is based on setup hours, and other overhead is based on oven hours.
Wellington produces two products, Fudge and Cookies. Information on each product is as follows:

Fudge Cookies
Units produced 8,000 445,000
Setup hours 6,400 1,600
Oven hours 1,600 8,000
Required:

1. Calculate the activity rate for (a) setting up equipment and (b) other overhead.

a. Setting up equipment $
per setup hour
b. Other overhead $
per oven hour
2. How much total overhead is assigned to Fudge using ABC?
$
3. What is the unit overhead assigned to Fudge using ABC? Round to the nearest cent.
$
per unit

4. Now, ignoring the ABC results, calculate the plantwide overhead rate, based on oven hours.
$
per oven hour

5. How much total overhead is assigned to Fudge using the plantwide overhead rate?
$
6a. The difference in the total overhead assigned to Fudge is different under the ABC system and non–ABC system because

.

6b. What is the difference in total overhead assigned to fudge under the two methods? Do not round intermediate calculations.

$

Which of the following accurately describes one way that individual goods differ from public goods? a. people can be excluded from using individual goods if they don't pay. b. all individual goods are normal goods. c. demand for individual goods is always inelastic. d. consumer rivalry results in decreasing marginal utility for individual goods.2b2t

Cool beans is a locally owned coffee shop that competes with two large coffee chains, planeteuro and frothies. alicia, the owner, hired two students to count the number of customers that entered each of the coffee shops to estimate what percent of people who are interested in coffee are visiting each shop. after a week, the students found the following results: 589 visited cool beans, 839 visited planeteuro, and 1,290 visited frothies. the students were surprised that cool beans had 139 visits on monday which represented 59% of all people who visited one of the three coffee shops on mondays. how many people visited one of the three coffee shops during the week?

Lo.2, 3, 9 lori, who is single, purchased 5-years class property for $200,00 and 7-years class property for $420,000 on may 20, 2018. lori experts the taxable income derived form the business (without regard to the amount expensed under ⧠179) to be about $550,000. lori has determined that she should elect immediate ⧠179 expensing in the amount of $520,000, but she doesn’t know which asset she should completely expense under ⧠179. she does not claim any available additional first-year depreciation. a. determine lori’s total cost recovery deduction if the ⧠179 expense is first taken with respect to the 5-year class asset. b. determine lori’s total cost recovery deduction if the ⧠179 expense is first taken with respect to the 7-year class asset. c. what is your advice for lori? d. assume that lori is in the 24% marginal tax bracket and that she uses ⧠179 on the 7-year asset. determine the present value of the tax savings from the depreciation deductions for both assets. see appendix g for present value factors, and assume a 6% discount rate. e. assume the same facts as in part (d), except that lori decides not to use ⧠179 on either asset. determine the present value of the tax savings under this choice. in addition, determine which option lori should choose. f. present your solution to parts (d) and (e) of the problem in a spreadsheet using appropriate microsoft excel formulas. e-mail your spreadsheet to your instructor with a two-paragraph summary of your findings.