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Several years after reengineening its production process, Enke Corp. hired a new controller, Barb Joe. She developed an ABC system very similar to the one used by Enke's chief rival, Southstream. Part of the reason Joe developed the ABC system was that Enke's profits had been declining even though the company had shifted its product mix toward the product that had appeared most profitable under the old system. Before adopting the new ABC system, Enke had used a plantwide overhead rate based on direct labour hours that was developed years ago.

For the upcoming year, Enke's budgeted ABC manufacturing overhead allocation rates are as follows:

$($Click the lcon to view the additional data.$)$

The number of parts is now a feasible allocation base because Enke recently purchased bar$-$coding technology. Enke produces two wheel models: Standard and Deluxe. Budgeted data for the upcoming year are as follows:

$($Click the icon to view the budgeted data.$)$

Requirement $1.$ Compute the total budgeted MOH cost for the upcoming year. $($Round the actiwity cost rates to the nearest cent. Round your final answers to the nearest whole dollar.$)$

$\backslash$table$[[$Activity$,\backslash$table$[[$Budgeted Quantity of$],[$Cost Allocation Ease$]],\backslash$table$[[$Activity Cost$],[$Allocation Rate$]],\backslash$table$[[$Total Budgeted$],[$Indirect Cost$]]],[$Materials handling$],[$Machine set$-$ups$],[$Insertion of parts$],[$Finishing$,,,]]$

Total budgeted indirect costManufacturing overhead allocation rates

$\backslash$table$[[$Activily$,$Allocation Base,$\backslash$table$[[$Activity Cost$],[$Allocation Rate$]]],[$Materials handling,Numberof parts,$4\mathrm{.}05$ perpart$],[$Machine set$-$up$,$Number of set$-$ups,$440$ per setup$],[$Insertion of parts,Number of parts,$25\mathrm{.}00$ perpart$],[$Finishing$,$Finishing direct labourhours,$55\mathrm{.}00$ per hour$]]$Budgeted data

$\backslash$table$[[,$Standard,Deluxe$],[$Parts per wheel,$7\mathrm{.}0,9\mathrm{.}0],[$Set$-$ups per $1200$ wheels,$36\mathrm{.}0,36\mathrm{.}0],[$Finishing direct labour hours per wheel,$1\mathrm{.}2,2\mathrm{.}3],[$Total direct labour hours per wheel,$1\mathrm{.}7,2\mathrm{.}9]]$

The company's managers expect to produce $1200$ units of each model during the year.

Requirements

$1.$ Compute the total budgeted MOH cost for the upcoming year.

$2.$ Compute the MOH cost per wheel of each model using ABC.

$3.$ Compute Enke's traditional plantwide overhead rate. Use this rate to determine the MOH cost per wheel under the traditional system.

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