Assignment: Smokey and the Bandit produces outdoor activity clothing. The product line consists of pants, jackets,...
Assignment:
Smokey and the Bandit produces outdoor activity clothing. The
product line consists of pants, jackets, tops, and accessories.
Data has been collected related to direct materials and direct
labor for the four product lines. Smokey and the Bandit has also
collected information on four possible cost drivers (units,
batches, machine hours, labor hours). All this information is
listed below. Construct a spreadsheet that will allocate overhead
for each of these alternative drivers and will calculate the total
per unit cost for each product line. Use the VLOOKUP function when
constructing the spreadsheet so that you can determine the effect
of different cost drivers on the overhead allocated and the
resulting cost per unit. Show vlookup formula on excel
properly, not just number
Product Line Units Average Sales
Price per unit Total Material Cost
Total Labor Cost
Pants 4,600 $73 $234,600
$20,115
Jackets 2,500 $98 $145,000
$25,200
Tops 9,800 $36 $156,800
$32,970
Accessories 18,500 $12 $ 37,000
$15,210
Product Line Batches
Machine Hours
Labor Hours
Pants 42 1,640
1,341
Jackets 26 1,730
1,400
Tops 78 2,600
2,198
Accessories 95 2,250
845
Total overhead cost to be allocated: $321,560
After constructing your spreadsheet answer the following
questions?
1. What is the total cost per unit of each product line
when machine hours are used as the cost driver for overhead
allocation?
2. How much overhead is allocated to Jackets when
direct labor hours are used as the cost driver for overhead
allocation?
3. What is the total cost of Tops when direct labor
hours are used as the cost driver for overhead allocation?
4. What is the total cost per unit of Accessories when
the number of batches is used as the cost driver for overhead
allocation?
5. What is the allocation rate when units are used as
the cost driver?
6. If you are the manager of the Jackets product line
which cost driver would you prefer? Why?
7. Currently the OH cost are being allocated based on
DL hours. If the company decides to use units as the cost driver
how would you react if you are the Accessories product line
manager?
Other information
• You must create a nicely formatted Excel spreadsheet
for the calculations, you need to create either a word document or
separate worksheet within your Excel file to answer the questions.
You must use the vlookup function.
• Format the assignment so that it looks appropriate.
Homework Answers
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Assignment:
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