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Access the following Week 4 Assignment in WileyPLUS: •Broadening

Resolved Question:

Access the following Week 4 Assignment in WileyPLUS:
•Broadening Your Perspective 17-2

Write a paper of no more than 750 words in which you respond to the Broadening Your Perspective 17-2 activity titled "Managerial Analysis" in Ch. 17 of Accounting.



BYP17-2 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 inhouse

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:



Total

Activities Cost Drivers Estimated Drivers

Market analysis Hours 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?
Submitted: 11 months ago.
Category: Multiple Problems
Expert:  F. Naz replied 11 months ago.
It will be my pleasure to do the assignment, by what time do you need the answer thanks.
Customer: replied 11 months ago.


I need the answer within the next two hours, if possible.

Expert:  F. Naz replied 11 months ago.
I can provide the answer in next 12 to 18 hours, will it work for you, thanks.
Customer: replied 11 months ago.


No, I need it sooner than that. It is due before the end of the day. I need to review it, edit, and have submitted.

Expert:  F. Naz replied 11 months ago.
I have opted out so other experts may help you, take care.
Customer: replied 11 months ago.


How soon before someone begins the assignment?

Expert:  Neo replied 11 months ago.
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