Auebach Enterprises Essay Example for Free

Auebach Enterprises EssayThese are not presented in studious discussion, precisely are simply the solutions. Student papers are expected to be written in scholarly discussion undermentioned APA formatting guidelines incorporating solutions and supported with scholarly research.CASE 3A AUERBACH ENTERPRISESAuerbach Enterprises manufactures air conditioners for automobiles and trucks manufactured throughout North America. The company designs its products with flexibility to accommodate many makes and models of automobiles and trucks. The companys two main products are MaxiFlow and Alaska. MaxiFlow uses a few complex fabricated parts, but these have been found easy to assemble and test. On the other hand, Alaska uses many standard parts but has a complex conference and testing process. MaxiFlow requires direct materials cost which total $135 per unit, while Alaskas direct materials requirements total $110 per unit. Direct labor costs per unit are $75 for MaxiFlow and $95 for Al aska. Auerbach Enterprises uses machine hours as the cost driver to assign overhead costs to the air conditioners. The company has used a company-wide predetermined overhead rate in past years, but the new controller, Bennie Leon, is considering the use of departmental overhead rates beginning with the next year.The following planning information is available for the next year for each the four manufacturing departments within the companyOverhead MachineCosts HoursRadiator parts fabrication.. $ 80,000 10,000Radiator assembly, weld, and test. 100,000 20,000Compressor parts fabrication. 120,000 5,000Compressor assembly and test.. 180,000 45,000Total $480,000 80,000Normally, the air conditioners are produced in batch sizes of 20 at a time. A production batch of 20 units requires the following number of hours in each departmentMaxiFlow AlaskaRadiator parts fabrication.. 28 16Radiator assembly, weld, and test. 30 74Compressor parts fabrication 32 8Compressor assembly and test 26 66Total 116 164Required1. Compute the departmental overhead rates exploitation machine hours as the cost driver. 2. Compute a company-wide overhead rate using machine hours as the cost driver. 3. Compute the overhead costs per batch of MaxiFlow and Alaska assuming (a) The company-wide rate.(b) The departmental rates.4. Compute the total costs per unit of MaxiFlow and Alaska assuming (a) The company-wide rate.(b) The departmental rates.5. Is one product affected more than the other by use of departmental rates rather than a company-wide rate? Why or why not?