The Following Scenarios Are Encountered by Lillie Manufacturing Company in Its

question 166

Short Answer

The following scenarios are encountered by Lillie Manufacturing Company in its many production facilities around the country. As the managerial accountant, you are asked to choose an appropriate support department cost allocation method. Indicate whether the scenario warrants the use of a single plantwide rate, multiple production department rates, or activity-based costing. Use each method only once.a.Single plantwide rate
b.Multiple production department rates
c.Activity-based costing
-Scenario 3: Lillie Manufacturing has a plant in Florida that has two support departments that both have limited activities performed by the departments. It has three production departments that build two simple products. This plant employs 100 people in the production facility and has two 8-hour shifts running five days a week.

---

Definitions:

Prevention Costs

Expenses incurred to prevent or minimize the number of defects in the manufacturing process.

Overapplied

A situation where the allocated overhead costs exceed the actual overhead costs incurred.

Manufacturing Overhead

Expenses related to manufacturing that cannot be directly tied to a specific product, such as salaries of supervisors and equipment depreciation.

Underapplied

A situation where the allocated or applied costs in accounting are less than the actual costs incurred.