(Solved): Allocate overhead using a single plantwide rate, multiple department rates, and activity-based costi ...

Allocate overhead using a single plantwide rate, multiple department rates, and activity-based costing Downhill Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Line Item DescriptionAmountIndirect labor$360,000Cutting Department250,000Finishing Department560,000 Total$1,170,000 The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: ActivityBudgeted Activity CostActivity BaseProduction control$90,000Number of production runsMaterials handling270,000Number of movesTotal$360,000 The activity-base usage quantities and units produced for the two products follow: Line Item DescriptionNumber of Production RunsNumber of MovesDirect Labor Hours-CuttingDirect Labor Hours-FinishingUnits ProducedSnowboards4505,0002,0004,0005,000Skis502,5003,0003,0005,000 Total5007,5005,0007,00010,000 Required: 1. Determine a single plantwide factory overhead rate based upon direct labor hours. fill in the blank 1 of 1Direct labor overhead rate: $ per direct labor hour 2. Determine the total and per-unit factory overhead costs allocated to each product, using the plantwide overhead rate in (1). Round per unit amounts to the nearest whole cent. ProductTotal Factory OverheadFactory Overhead Per UnitSnowboards$fill in the blank 2$fill in the blank 3Skis$fill in the blank 4$fill in the blank 5 3. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is $435,000 and $735,000 for the Cutting and Finishing departments, respectively. Round per unit amounts to the nearest whole cent. DepartmentProduction Department RateCutting Department$fill in the blank 6 per direct labor hourFinishing Department$fill in the blank 7 per direct labor hour 4. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (3). Round per unit amounts to the nearest whole cent. ProductTotal Factory OverheadFactory Overhead Per UnitSnowboards$fill in the blank 8$fill in the blank 9Skis$fill in the blank 10$fill in the blank 11 5. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. Round per unit amounts to the nearest whole cent. ActivityActivity RateProduction Control$fill in the blank 12 per prod. runMaterials Handling$fill in the blank 13 per moveCutting Department$fill in the blank 14 per dlhFinishing Department$fill in the blank 15 per dlh 6. Determine the total and per-unit cost assigned to each product under activity-based costing. Round the per unit amounts to the nearest whole cent. ProductTotal Activity CostActivity Cost Per UnitSnowboards$fill in the blank 16$fill in the blank 17Skis$fill in the blank 18$fill in the blank 19 7. Comment on the differences in the per-unit overhead allocated to each product using the single plantwide factory overhead rate method, the multiple production department factory overhead rate method, and activity-based costing. The plantwide overhead method allocates fill in the blank 1 of 15$ of overhead to each product, while the multiple production department method allocates fill in the blank 2 of 15$ overhead to snowboards and fill in the blank 3 of 15$ to skis. Both the plantwide and multiple production department methods fill in the blank 4 of 15 dodo not distort the allocation of overhead because they fill in the blank 5 of 15 adequatelydo not adequately account for how each product consumes overhead. In contrast, activity-based costing allocates fill in the blank 6 of 15$ of factory overhead to snowboards and fill in the blank 7 of 15$ to skis. Activity-based costing fill in the blank 8 of 15 moreless accurately allocates factory overhead because fill in the blank 9 of 15 it better accountsit does not better account for how each product consumes overhead. Snowboards consume fill in the blank 10 of 15 moreless direct labor hours in the Finishing Department, which has fill in the blank 11 of 15 moreless overhead. In addition, snowboards consume fill in the blank 12 of 15 moreless production control and materials handling overhead than do skis. This is because snowboards are made in fill in the blank 13 of 15 smallerbigger lots, representing a fill in the blank 14 of 15 wideshort variety of styles. Thus, snowboards have fill in the blank 15 of 15 higherlower activity costs than skis. Check My Work1 more Check My Work uses remaining.