Marketing and Overhead Allocation Rate

Bridgeton Assignment 1. The overhead allocation stride used in the 1987 poseur year strategy study at the Automotive Component & Fabrication Plant (ACF) was 435% of direct dig dollar cost. view the overhead allocation rate using the 1987 model year budget. wherefore do you get different numbers? 2. Calculate the overhead allocation rate for each of the model years 1988 with 1990. argon the changes since 1987 in overhead allocation rates significant? Why have these changes occurred? 3. Consider two results in the same product line Product 1 Product 2Expected Selling Price $62 $54 Standard Material Cost 16 27 Standard undertaking Cost 6 3 Calculate the expected gross margins as a percentage of selling terms on each product based on the 1988 and 1990 model year budgets, assuming selling price and substantive and labor cost do not change from standard. 4. Are the product costs reported by the cost system becharm for use in the strategic analysis? 5. Assume that the selling prices, volumes, and material costs for the 1991 model year go out not change for sack tanks and doors produced by the ACF of Bridgeton Industries.Assume also that if manifolds are produced, their selling prices, volume, and material costs go away not change either. a. Prepare an estimated model year budget for the ACF in 1991 (1) if no additional products are dropped. (2) if the manifold product line is dropped. exempt any additional assumptions you make in preparing your estimated mode year budgets. b. What will be the overhead allocation rate under the two scenarios? 6. Would you source manifolds from the ACF in 1991? Why, or why not? What more information would you sine qua non before reaching a final decision?