Question;Accessthe following Week 4 Assignment in WileyPLUS:Broadening Your Perspective 17-2Writea paper of no more than 750 words in which you respond to the Broadening Your Perspective 17-2 activity titled "Managerial Perspective" in Ch. 17 of Accounting.Clickthe Assignment Files tab to submit your assignment.BYP17-2;MANAGERIAL ANALYSIS;Ideal Manufacturing Company of Sycamore, Illinois, has;supported a research and development (R&D) department that has for many;years been the sole contributor to the company's new farm machinery products.;The R&D activity is an overhead cost center that provides services only to;in-house manufacturing departments (four different product lines), all of which;produce agricultural/farm/ranch related machinery products.;The department has never sold its services outside, but;because of its long history of success, larger manufacturers of agricultural;products have approached Ideal to hire its R&D department for special;projects. Because the costs of operating the R&D department have been;spiraling uncontrollably, Ideal's management is considering entertaining these;outside approaches to absorb the increasing costs. But, (1) management doesn't;have any cost basis for charging R&D services to outsiders, and (2) it needs;to gain control of its R&D costs. Management decides to implement an;activity-based costing system in order to determine the charges for both;outsiders and the in-house users of the department's services.;R&D activities fall into four pools with the following annual;costs.;Market analysis$1,050,000;Product design 2,350,000;Product development 3,600,000;Prototype testing 1,400,000;Activity analysis determines that the appropriate cost;drivers and their usage for the four activities are;Activities Cost;Drivers Total Estimated Drivers;Market analysisHours;of analysis 15,000 hours;Product design Number;of designs 2,500 designs;Product development Number;of products 90 products;Prototype testing Number;of tests 500 tests;Instructions;(a);Compute the activity-based overhead rate for each activity;cost pool.;(b);How much cost would be charged to an in-house manufacturing;department that consumed 1,800 hours of market analysis time, was provided 280;designs relating to 10 products, and requested 92 engineering tests?;(c);How much cost would serve as the basis for pricing an;R&D bid with an outside company on a contract that would consume 800 hours;of analysis time, require 178 designs relating to 3 products, and result in 70;engineering tests?;(d);What is the benefit to Ideal Manufacturing of applying;activity-based costing to its R&D activity for both in-house and outside;charging purposes?
Paper#41049 | Written in 18-Jul-2015Price : $24