ACC 2362 Managerial Accounting – Ramsey Company – Activity-Based costing

  

ACC 2362 Managerial
Accounting: Excel Project #1 – Chapters
3 & 4 – Predetermined OH Rate, Departmental OH Rates, and Activity Based
Rates

1. Read these instructions completely before you
   begin the Excel project.
2. Academic Honesty:The
   project should reflect your individual work. This is NOT a group project– sharing answers or spreadsheet
   formats is considered academic dishonesty. If you
   use a spreadsheet from a prior semester or someone else’s spreadsheet, you
   will receive a zero for the project and an honor code violation will be
   filed.
3. Due date:Friday, September
   23rd at the START of your class period or
   earlier. If you arrive more than 10
   minutes late to class to turn in your project, there will be a 25%
   penalty. If you turn it in after
   class has ended, you will NOT
   receive credit for the assignment.
4. Deliverables: Attach
   a copy of the cover sheet to a printed copy of the completed Excel
   spreadsheet which will be turned in during your class period. An electronic copy of the
   assignment only (no cover sheet) will be submitted to TRACS via the Drop
   Boxfunction in accordance with the due date and time stated
   above. You will not receive full credit unless both the printed copy and
   electronic copy are turned in by the due date.No hand written
   assignments or e-mail attachments will be accepted.

5. Specific Directions:This assignment will not be done through MyAccountingLab. It must be completed using Excel, a
spreadsheet application.

·
Use the Excel Project #1 F16template
as your starting point. Remember not to use a spreadsheet from a
prior semester or someone else’s spreadsheet or you will receive a zero for the
project.

·
The data included in the
template will serve as your data source for all your other cells in Excel. Everything in the boxed area should either be
a cell reference or an Excel formula. No
hard-coded numbers.

·
The information provided for
direct labor hours, machine hours, set ups, inspection costs, & packing
costs will be used for both the estimated activity levels and the actual
activity levels.

6.
Grading:
Assignment is worth 10 points. Presentation of the information and how
easily it can be read will be considered in the grading of the project.

·
5 points will be for the
content, accuracy of the calculations, and completeness.

·
5 points will be for the use of
technology and communication of data.

7.
Excel Help:

·
See TRACS – Resources for a
sheet offering Microsoft Office keyboard short cuts.

·
CIS tutoring lab McCoy 336

·
YouTube offers many Excel
tutorials.

·
Office hours: GA Jordan Draper:
Tuesday, September 20th from 2:00 to 4:00 PM, McCoy 442

·
Professors regularly scheduled
office hours. Come by the office if you
need help.

1. Lastly, remember, the project is due at the START
   of your class period. There is normally a back up in the computer lab on the due date
   with students printing the assignment at the last hour so don’t be caught.
   Remember, there are penalties associated with late work. Don’t wait until the last minute to
   work on it, print out the results to review it for accuracy. Do
   your own work!

ACC 2362 Managerial
Accounting: Excel Project #1 – Chapters
3 & 4 – Predetermined OH Rate, Departmental OH Rates, and Activity Based
Rates

Ramsey
Company produces speakers (Model A and Model B). Ramsey’s controller, Mr. Jacks, is evaluating
the different methods of allocating manufacturing overhead to the
products. Both products pass through two
producing departments. Model A’s
production is much more labor-intensive than that of Model B. Model B is also more popular of the two
speakers. The following data have been
gathered for the two products.

1) Compute
the product cost per unit and the gross profit per unit for each product
by using a simple cost allocation method (plant-wide rate) based on direct
labor hours. Round your final answers to
two decimal places.

2) Compute
the product cost per unit and the gross profit per unit for each product
by using Activity-Based costing (ABC).
Round your final answers to two decimal places.

Suppose
that Ramsey decides to use departmental overhead rates. There are two departments: Department 1 (machine intensive) with an MOH rate
of $0.48 per machine hour and Department 2 (labor intensive)with an MOH rate of
$0.80 per direct labor hour. The actual consumption
of these two drivers is as follows:

3) Compute
the product cost per unit and the gross profit per unit for each product
by using the departmental MOH rates. Round your final answers to two decimal
places.

4) Compare
the results for the simple cost allocation system (plant-wide), departmental
cost allocation and the ABC cost allocation systems.

Which do you think is more accurate and why?

What circumstances would favor Ramsey
adopting ABC as their allocation method (provide at least three reasons)?

Do you think Ramsey should adopt ABC as
their allocation method? Why or why not?