Carriage Hill Tooling produces specialized equipment

Subject:AccountingPrice: Bought3

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Carriage Hill Tooling produces specialized equipment. ICurrently, overhead costs are allocated at a rate of $25 per machine hour and the company used 4,2430 machine hours last year. Carriage Hill's CEO, Ralston, would like to see if ?ctivity—Based Costing (EEC) would make any difference in the costs allocated to jobs at the company. The accounting staff has provided the following information about manufacturing overhead: Cost Cost Driver Setups $31,2tl? Number of setups Equipment 311,344) Number of machine hours Inspection 362,46? Number of inspections The company estimates that it will perform 120 setups and 4-tl? inspections next year and will use an estimate of 4,200 machine hours. A coining order,_]ob 345, will require 5 setups, Till) machine hours, and 12 inspections. Provide info?nation to answer each of the following questions, showing calculations clearly and completely. a) Brie?y summariZe the difference in using a single plant—wide overhead rate vs. ABC, including on advantage of each. 1i'lli'rite this in proper English in complete sentences with proper punctuation. b} Using ABC, what mount of manufacturing overhead will be allocated to Job 345? Show all calculations. Round dollars to two decimal places. c] 1ilii'hat aroo'unt would Ralston allocate to job 345 using the company's current, historical system? Show all calculations. Round dollars to two decimal places. d} 1ilii'hy do the two methods yield such different answers? Explain in Write this in proper English in complete sentences with proper punctuation.