APU ACCT300 Week 8 final paper



Completea 3-5 page paper using APA formatting for the scenario and questions listed below. Youmust submittwo attachments for this assignment:

  1. Your paper in Word format
  2. A pdf copy of your Originality Report from Turnitin. For instructions on how to do this, see page 27, “Printing or Saving Reports”, in the .turnitin.com/en_us/training/student-training/student-user-manual”>Turnitin Student User Manual.

Your paper will not be graded if you do not submit an Originality Report.For instructions on how to do this, see page 27, “Printing or Saving Reports”, in the .turnitin.com/en_us/training/student-training/student-user-manual”>Turnitin Student User Manual. This manual is a great resource for students, so be sure to save the link and access it when you have any questions on setting up your account, submitting or resubmitting papers, viewing and saving reports, etc.

You can find the Turnitin Class ID and Password in the Week 1 Turnitin Announcement.

Save your file as “LastnameFirstinitial-ACCT300-8“.

Submit your assignment by midnight Eastern Time on Day 7 (Sunday).

Fabricator Inc., a specialized equipment manufacturer, uses a job order costing system. The overhead is allocated to jobs on the basis of direct labor hours. The overhead rate is now $ 3,000 per direct labor hour. The design engineer thinks that this is illogical. The design engineer has stated the following: Our accounting system doesn’t make any sense to me. It tells me that every labor hour carries an additional burden of $3,000. This means that while direct labor makes up only 5% of our total product cost, it drives all our costs. In addition, these rates give my design engineers incentives to “design out” direct labor by using machine technology. Yet, over the past years as we have had less and less direct labor, the overhead rate keeps going up and up. I won’t be surprised if next year the rate is $4,000 per direct labor hour. I’m also concerned because small errors in our estimates of the direct labor content can have a large impact on our estimated costs. Just a 30-minute error in our estimate of assembly time is worth $1,500. Small mistakes in our direct labor time estimates really swing our bids around. I think this puts us at a disadvantage when we are going after business.1. What is the engineer’s concern about the overhead rate going “up and up”?2. What did the engineer mean about the large overhead rate being a disadvantage when placing bids and seeking new business?3. What do you think is a possible solution?


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