BUS 630 Week 2 Assignment CASE 3A AUERBACH ENTERPRISES

Ashford University

Managerial Accounting

BUS 630

BUS 630 Week 2 Assignment

MaxiFlow requires direct materials costs which total 135 per unit, while Alaska's direct materials requirements total 110 per unit. Direct labor costs per unit are 75 for MaxiFlow and 95 for Alaska.

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 company:

Overhead Machine

Costs...