Tires Unlimited Corp

question 145

Essay

Tires Unlimited Corp. produces two types of tires, regular and snow tires. The company uses activity-based costing and has identified two activities and their budgeted costs:
Molding is based on mixing hours and assembly is based on machine hours. Information regarding each product is as follows:
Required:
A. Calculate the activity rate for molding and assembly. Round your answer to two decimal places.
B. Calculate how much total overhead is assigned to each type of tire.
C. Calculate the unit overhead assigned to each type of tire.
D. Assume the company does not use ABC costing. Calculate the plantwide overhead rate, based on machine hours. Round your answer to two decimal places.
E. Calculate the total overhead assigned to each type of tire using the plantwide overhead rate.

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Definitions:

Information Technology

The use of computers, networks, and other physical devices to store, process, and exchange data.

Outside Suppliers

External organizations or individuals that provide goods or services to a company, often part of the supply chain or procurement process.

Essential Core Functions

Fundamental activities or duties that are necessary for an organization or system to operate effectively and achieve its objectives.

Outsource

The practice of hiring third-party vendors to perform tasks, handle operations or provide services that are either difficult to manage or outside of a company's core competencies.