**Implementation and Analysis of Departmental Rates (Learning Objective 1)**Hughes Products manufactures its products in two separate departments: Machining and Assembly. Total manufacturing overhead costs for the year are budgeted at $1,056,000. Of this amount, the Machining Department incurs $600,000 (primarily for machine operation and depreciation), while the Assembly Department incurs $456,000. The company estimates it will incur 4,000 machine hours (all in the Machining Department) and 9,600 direct labor hours (1,600 in the Machining Department and 8,000 in the Assembly Department) during the year.Hughes Products currently uses a plantwide overhead rate based on direct labor hours to allocate overhead. However, the company is considering refining its overhead allocation system by using departmental overhead rates. The Machining Department would allocate its overhead using machine hours (MH), but the Assembly Department would allocate its overhead using direct labor (DL) hours. **Chapter 4**The following chart shows the machine hours (MH) and direct labor (DL) hours incurred by Jobs 500 and 501 in each production department:| | Machining Department | Assembly Department ||---------------------------|----------------------|---------------------|| **Job 500** | 10 MH | 15 DL hours || | 2 DL hours | || **Job 501** | 20 MH | 15 DL hours || | 2 DL hours | |Both Jobs 500 and 501 used $1,000 of direct materials. Wages and benefits total $30 per direct labor hour. Hughes Products prices its products at 120% of total manufacturing costs.**Requirements**1. Compute the company’s current plantwide overhead rate.2. Compute refined departmental overhead rates.3. Which job (Job 500 or Job 501) uses more of the company’s resources? Explain.4. Compute the total amount of overhead allocated to each job if the company uses its current plantwide overhead rate.5. Compute the total amount of overhead allocated to each job if the company uses departmental overhead rates.6. Do both allocation systems accurately reflect the resources that each job used?7. Compute the total manufacturing cost and sales price of each job using the company’s current plantwide overhead rate.8. Based on the current (plantwide) allocation system, how much profit did the company think it earned on each job? Based on the refined departmental overhead rates and the sales price determined in Requirement 7, how much profit did it really earn on each job?9. Compare and comment on the results you obtained in Requirements 7 and 8.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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XX is aware that there is a learning effect for the production of one of its new products, but is unsure about the degree of learning. The following data relate to this product. Time taken to produce the first unit 28 direct labour hours Production to date 15 units Cumulative time taken to date 104 direct labour hours What is the percentage learning effect?
Salsa has two service departments, the IT Department and HR Department. Salsa also has two production departments, the Cutting department and the Mixing Department. The usage of the two service departments’ output for the year is as follows: Provider of Service User of Service IT HR IT - 15 % HR 5 % - Cutting 45 % 25 % Mixing 50 % 60 % The budgeted costs in the two service departments for the year as follows: IT: $ 400,000 HR: $ 600,000 Use a.) direct method, b.) step-down method and c.) reciprocal services method to allocate the budgeted costs of the two service departments to production departments. Please donot provide solution in image format provide solution in step by step and fast solution
Activity-Based Costing Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools: FabricationDepartment FinishingDepartment Cost Driver Maintenance $ 36,000 18,000 Machine hours Materials handling 54,000 27,000 Material moves Machine 126,000 9,000 Machine setups Inspections - 45,000 Inspection hours Total $ 216,000 $ 99,000 The following activity predictions were also made for the year: FabricationDepartment FinishingDepartment Machine hours 5,000 2,500 Material moves 1,500 750 Machine setups 350 25 Inspection hours - 500 It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering…
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4.B. Salsa has three service departments, the Maintenance Department, the IT Department and HR Department. Salsa has also two production departments, the Cutting department and the Mixing Department. The usage of the three service departments' output for the year is as follows: Provider of Service User of Service Maintenance IT HR Maintenance 5 % HR IT 10 % 5 % |Cutting 35 % 45% 65% Mixing 55 % 55% 25% The budgeted costs in the three service departments for the year as follows: Maintenance: $ 180,000 IT: $ 120,000 HR: $ 280,000 Use step-down method to allocate the budgeted costs of the three service departments on production departments.
Homework/2020 Pitt Jones Company had the following activities, allocated costs, and allocation bases: Activities Allocated Costs Allocation Base Account inquiry (hours) $60,000 2,000 hours Account billing (lines) $30,000 20,000 lines Account verification (accounts) $15,000 20,000 accounts Correspondence (letters) $10,000 1,000 letters The above activities are carried out at two of their regional offices. Northeast Office Midwest Office Account inquiry (hours) 100 hours 200 hours Account billing (lines) 10,000 lines 7,000 lines Account verification (accounts) 1,000 accounts 600 accounts Correspondence (letters) 50 letters 100 letters How much of the account verification costs will be assigned to the Northeast Office?
3 - B.4.A. Salsa has two service departments, the IT Department and HR Department. Salsa has also two production departments, the Cutting department and the Mixing Department. The usage of the two service departments' output for the year is as follows: Provider of Service User of Service IT HR IT 5 % HR 10 % Cutting 40 % 25 % Mixing 50 % 70 % The budgeted costs in the two service departments for the year as follows: IT: $ 200,000 HR: $ 300,000 Use reciprocal services method to allocate the budgeted costs of the two service departments on production departments.
Requirement 1. Calculate the total variable costs of producing 2, 3, and 4 units assuming that Northern Defense uses an 85% incremental unit-time learning model as a basis for predicting manufacturing labor-hours. Begin by calculating the cumulative total time in labor-hours using the incremental unit-time learning model. (Round the individual unit time for Xth unit to the nearest whole number) Individual unit time for Cumulative total time: Cumulative number of units 1 2 Xth unit: Labor-hours Labor-hours 3 Data table Direct materials cost Direct manufacturing labor time for first unit Learning curve for manufacturing labor time per radar system Variable manufacturing overhead costs $ 83,000 per unit of RS-32 Direct manufacturing labor costs "Using the formula for an 85% learning curve, b= In 0.85 In 2 -0.162519 0.693147 3,900 direct manufacturing labor-hours 85% incremental unit-time" 20 per direct manufacturing labor-hour 12 per direct manufacturing labor-hour =-0.234465
Question 4: Dhofar Company manufactures two products M1 and Z1. Its sales department has three divisions: Salalah, Raysut and Mirbat. Initial estimates for the sales budgets for the year ending 31 December 2021 which are based on the assessments of the divisional executives are as follows; Product M1 : Salalah 45,000 units: Raysut 110,000 units and Mirbat: 25,000 units Product Z1: Salalah 70,000 units: Raysut 82,000 units and Mirbat:0 Sales Prices: M1: 3 OMR and Z1= 4 OMR in all areas. Arrangements are made for the extensive advertising of product M1 and Z1 and it is estimated that Salalah division sales will increase by 30,000 units. Arrangements are also made to advertise and distribute product z1 in the Mirbat area in the second half of 2021 when sales are expected to be 100,000 units. Since the estimated sales of the Raysut division represented an unsatisfactory target, it is agreed to increase both the estimates by 15 %. Prepare a sales budget for the year to 31…
4- B.4.B. Salsa has two service departments, the IT Department and HR Department. Salsa has also two production departments, the Cutting department and the Mixing Department. The usage of the two service departments' output for the year is as follows: Provider of Service User of Service IT HR HR 15 % IT 5 % Cutting 45 % 65 % Mixing 40 % 30 % The budgeted costs in the two service departments for the year as follows: IT: $ 120,000 HR: $ 280,000 Use reciprocal services method to allocate the budgeted costs of the two service departments on production departments.
Question 4: Dhofar Company manufactures two products M1 and Z1. Its sales department has three divisions: Salalah Ravsut and Mirkat. Initial estimates for the sales budgets for the year ending 31 December 2021 which are based on the assessments of the divisional executives are as follows; Product M1 : Şalalah 45,000 units: Raxsut 110,000 units and Mirkat; 25,000 units Product Z1: Salalah 70,000 units: Raysut 82,000 units and Mirbat:0 Sales Prices: M1: 3 OMR and Z1= 4 OMR in all areas. Arrangements are made for the extensive advertising of product M1 and Z1 and it is estimated that Salalah division sales will increase by 30,000 units. Arrangements are also made to advertise and distribute product z1 in the Mirkat area in the second half of 2021 when sales are expected to be 100,000 units. Since the estimated sales of the Ravsut division represented an unsatisfactory target, it is agreed to increase both the estimates by 15 %. Prepare a sales budget for the year to 31 December 2021.
Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: (Click icon to view data) Requirement Calculate the total variable costs of producing 2, 4, and 8 units. Begin by calculating the cumulative total time in labor-hours using the cumulative average-time learning model. (Round the cumulative average time per unit to the nearest whole number.) Cumulative number of Cumulative average time units 2 per unit: Labor-hours Cumulative total time: Labor-hours 4 8 Data table Direct material cost $ 84,000 per unit of RS-32 Direct manufacturing labor time for first unit Learning curve for manufacturing labor time per radar system 3,800 direct manufacturing labor-hours 85% cumulative average time² Direct manufacturing labor cost $ 23 per direct manufacturing labor-hour Variable manufacturing overhead cost $ 17 per direct manufacturing labor-hour Using the formula for an 85% learning…

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