Dura Drums Ltd. (located in Jamaica) experiences wide variation in demand for the 500-litre steel drums it fabricates. The leakproof,rustproof steel drums have a variety of uses, from storing liquids and bulk materials to serving as makeshift musical instruments. Thedrums are made to order and are painted according to the customer's specifications-often in bright patterns and designs. Thecompany is well known for the artwork that appears on its drums. Unit costs are computed on a quarterly basis by dividing eachquarter's manufacturing costs (materials, labour and overhead) by the quarter's production in units. The company's estimated costs, byquarter, for the coming year are as follows:Direct materialsDirect labourManufacturing overheadTotal manufacturing costsNumber of units to be producedEstimated cost per unitQuarterFirst$ 130,000100,000Second Third$260,000 $ 65,000200,000 50,000240,000 320,000 190,000$ 470,000 $ 780,000 $305,00080,000 20,0009.75 $ 15.25 $Predetermined overhead rate40,00011.75 $Fourth$195,000150,000290,000Management finds the variation in unit costs to be confusing and difficult to work with. It has been suggested that the problem lies withmanufacturing overhead, since it is the largest element of cost. Accordingly, you have been asked to find a more appropriate way ofassigning manufacturing overhead cost to units of product. After some analysis, you have determined that the company's overheadcosts are mostly fixed and therefore show little sensitivity to changes in the level of production.per unit$635,00060,00010.58Required:1. What would be the predetermined manufacturing overhead rate for the year on the basis of total units to be produced? (Round youranswer to 2 decimal places.)2. Recompute the company's unit costs in accordance with your recommendations in part (1). (Round "Unit product cost" to 2 decimalplaces.)Check m

Name: Dura Drums Ltd. (located in Jamaica) experiences wide variation in de
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Dura Drums Ltd. (located in Jamaica) experiences wide variation in demand for the 500-litre steel drums it fabricates. The leakproof,rustproof steel drums have a variety of uses, from storing liquids and bulk materials to serving as makeshift musica

Predetermined manufacturing overhead rate is calculated by dividing the total estimated…

Business

Accounting

1. What would be the predetermined manufacturing overhead rate for the year on the basis of total units to be produced? (Round your answer to 2 decimal places.) Predetermined overhead rate per unit 2. Recompute the company's unit costs in accordance with your recommendations in part (1). (Round "Unit product cost" to 2 decimal places.)

1. What would be the predetermined manufacturing overhead rate for the year on the basis of total units to be produced? (Round your answer to 2 decimal places.) Predetermined overhead rate per unit 2. Recompute the company's unit costs in accordance with your recommendations in part (1). (Round "Unit product cost" to 2 decimal places.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Labour data for making one unit of finished product in Waterway Company are as follows: (1) Price-hourly wage rate $10.00, payroll taxes $0.80, and fringe benefits $1.60. (2) Quantity-actual production time 1.40 hours, rest periods and cleanup 0.50 hours, and set-up and downtime 0.40 hours. Calculate the following: (Round calculations and final answers to 2 decimal places, e.g. 15.25.) a. Standard direct labour rate per hour $enter a dollar amount rounded to 2 decimal places b. Standard direct labour hours per unit enter a number of hours rounded to 2 decimal places hours c. Standard labour cost per unit Senter a dollar amount rounded to 2 decimal places
Heidelberg Fabrication manufactures two products, G-09 and G-35: Units produced Direct materials cost per unit Machine-hours per unit Production runs per quarter G-09 19,400 $7 4 144 Machine depreciation Setup labor Materials handling Total Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow: G-35 3,880 $ 19 7 72 $184,760 52,380 41,904 $ 199,044 Required: a. Heidelberg currently applies overhead on the basis of machine-hours. What is the predetermined overhead rate for the quarter? Note: Round your answer to 2 decimal places. b. Heidelberg is thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: machine-hours for machine depreciation, production runs for setup labor, and direct material dollars for materials handling. Compute the cost driver rates for the proposed system at Heidelberg.
please explain in steps
for 11; 12; 13; and 15 11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? Note: Round intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal place. 12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? Note: Round intermediate calculations and your "Percentage" answers to 2 decimal places. 13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? Note: Round intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. 15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? Note: Round intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal place.