Task Smokey and the Bandit produces “sports towels.” These are towels that has t
ID: 2335946 • Letter: T
Question
Task
Smokey and the Bandit produces “sports towels.” These are towels that has the promotion of an event or a logo printed on it. These towels come in five sizes: regular, mid-size, hand, large, special. Data has been collected related to direct materials and direct labor for the five types of towels. Smokey and the Bandit has also collected information on four possible cost drivers (units, orders, machine hours, labor hours). All this information is listed below.
Towel
Units
Sales Price
Material Cost per unit
Labor Cost per unit
Regular
46,000
$3.60
$0.65
$0.37
Mid-Size
25,500
$3.20
$0.55
$0.33
Hand
131,800
$2.55
$0.41
$0.31
Large
28,500
$4.50
$0.70
$0.45
Special
4,500
$4.00
$0.67
$0.48
Towel
Orders
Machine Hours
Labor Hours
Regular
640
5,640
1,341
Mid-Size
1,310
8,730
1,400
Hand
304
7,600
3,198
Large
950
4,750
845
Special
90
1,125
144
Total overhead cost to be allocated: $94,360
Required:
Use the VLOOKUP function to construct a spreadsheet that will allocate overhead for each of these alternative drivers and will calculate the total per unit cost (round to two decimal points) for each type of towel. Each time you construct a spreadsheet for a cost driver, copy and paste (use paste special - Values function) this to a new worksheet to summarize the effect of different cost drivers on the overhead allocated and the resulting cost per unit. Name the new worksheet as “Summary Worksheet”. Therefore, your summary worksheet should contain 4 spreadsheets to show the effect of the four cost drivers on the Overhead calculated and the unit costs.
After constructing your spreadsheet answer the following questions separately under Section B?
What is the total cost per unit of each type of towel when machine hours are used as the cost driver for overhead allocation?
How much overhead is allocated to the Hand towels when direct labor hours are used as the cost driver for overhead allocation?
What is the total cost of the Special towels when direct labor hours are used as the cost driver for overhead allocation?
What is the total cost per unit of the Large towels when the number of orders is used as the cost driver for overhead allocation?
What is the allocation rate when units are used as the cost driver?
NOTE
Here is what i have so far in excel. I am not sure if my calculations are wrong.
Towel
Units
Sales Price
Material Cost per unit
Labor Cost per unit
Regular
46,000
$3.60
$0.65
$0.37
Mid-Size
25,500
$3.20
$0.55
$0.33
Hand
131,800
$2.55
$0.41
$0.31
Large
28,500
$4.50
$0.70
$0.45
Special
4,500
$4.00
$0.67
$0.48
Explanation / Answer
Ans-
Cost as per individual driver Units Orders Machine Hours Labor Hours Regular 46,000 640 5640 1341 Mid-Size 25,500 1310 8730 1400 Hand 131,800 304 7600 3198 Large 28,500 950 4750 845 Special 4,500 90 1125 144 Total 236,300 3,294 27,845 6,928 Overhead Cost 94,360 94,360 94,360 94,360 Allocation rate as per individual driver 0.399322895 28.64602307 3.388759203 13.62009238Related Questions
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