Acc 2362 managerial accounting – ramsey company – activity-based

ACC 2362 Managerial Accounting:  Excel Project #1 – Chapters 3 & 4 – Predetermined OH Rate, Departmental OH Rates, and Activity Based Rates


  1. Read these instructions completely before you begin the Excel project.
  2. Academic Honesty:The project should reflect your individual work.  This is NOT a group project – sharing answers or spreadsheet formats is considered academic dishonesty.   If you use a spreadsheet from a prior semester or someone else’s spreadsheet, you will receive a zero for the project and an honor code violation will be filed.
  3. Due date:Friday, September 23rd at the START of your class period or earlier.  If you arrive more than 10 minutes late to class to turn in your project, there will be a 25% penalty.  If you turn it in after class has ended, you will NOT receive credit for the assignment.
  4. Deliverables: Attach a copy of the cover sheet to a printed copy of the completed Excel spreadsheet which will be turned in during your class period.  An electronic copy of the assignment only (no cover sheet) will be submitted to TRACS via the Drop Box function in accordance with the due date and time stated above.  You will not receive full credit unless both the printed copy and electronic copy are turned in by the due date.No hand written assignments or e-mail attachments will be accepted.

5.       Specific Directions:This assignment will not be done through MyAccountingLab.  It must be completed using Excel, a spreadsheet application. 

·         Use the Excel Project #1 F16template as your starting point.  Remember not to use a spreadsheet from a prior semester or someone else’s spreadsheet or you will receive a zero for the project. 

·         The data included in the template will serve as your data source for all your other cells in Excel.  Everything in the boxed area should either be a cell reference or an Excel formula.  No hard-coded numbers.

·         The information provided for direct labor hours, machine hours, set ups, inspection costs, & packing costs will be used for both the estimated activity levels and the actual activity levels.


6.       Grading:  Assignment is worth 10 points. Presentation of the information and how easily it can be read will be considered in the grading of the project.

·         5 points will be for the content, accuracy of the calculations, and completeness.

·         5 points will be for the use of technology and communication of data.


7.       Excel Help:

·         See TRACS – Resources for a sheet offering Microsoft Office keyboard short cuts.

·         CIS tutoring lab McCoy 336

·         YouTube offers many Excel tutorials.

·         Office hours: GA Jordan Draper: Tuesday, September 20th from 2:00 to 4:00 PM, McCoy 442

·         Professors regularly scheduled office hours.  Come by the office if you need help.


  1. Lastly, remember, the project is due at the START of your class period.  There is normally a back up in the computer lab on the due date with students printing the assignment at the last hour so don’t be caught.  Remember, there are penalties associated with late work.  Don’t wait until the last minute to work on it, print out the results to review it for accuracy.   Do your own work!             


ACC 2362 Managerial Accounting:  Excel Project #1 – Chapters 3 & 4 – Predetermined OH Rate, Departmental OH Rates, and Activity Based Rates


Ramsey Company produces speakers (Model A and Model B).  Ramsey’s controller, Mr. Jacks, is evaluating the different methods of allocating manufacturing overhead to the products.  Both products pass through two producing departments.  Model A’s production is much more labor-intensive than that of Model B.  Model B is also more popular of the two speakers.  The following data have been gathered for the two products.



Product Data



Model A


Model B

Units produced & sold per year





Sales Revenue





Prime cost





Direct Labor Hours





Machine hours





Set Ups





Inspection runs





Packing Orders





Estimated Manufacturing Overhead:





    Machining costs





Setup costs





Inspection costs





  Packing costs





     Total Manufacturing Overhead






1)    Compute the product cost per unit and the gross profit per unit for each product by using a simple cost allocation method (plant-wide rate) based on direct labor hours.  Round your final answers to two decimal places.


2)    Compute the product cost per unit and the gross profit per unit for each product by using Activity-Based costing (ABC).  Round your final answers to two decimal places.


Suppose that Ramsey decides to use departmental overhead rates.  There are two departments:  Department 1 (machine intensive) with an MOH rate of $0.48 per machine hour and Department 2 (labor intensive)with an MOH rate of $0.80 per direct labor hour.  The actual consumption of these two drivers is as follows:



Department 1


Department 2



Machine Hours

Direct Labor Hours

Model A



Model B




3)    Compute the product cost per unit and the gross profit per unit for each product by using the departmental MOH rates. Round your final answers to two decimal places.



4)    Compare the results for the simple cost allocation system (plant-wide), departmental cost allocation and the ABC cost allocation systems. 


Which do you think is more accurate and why?

What circumstances would favor Ramsey adopting ABC as their allocation method (provide at least three reasons)? 


Do you think Ramsey should adopt ABC as their allocation method?  Why or why not?





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