53-6 Compute various manufacturing overhead rates (Learning Objective 3)Edmonton Pools manufactures swimming pool equipment. Edmonton estimates totalmanufacturing overhead costs next year to be $1,400,000. Edmonton also estimates itwill use 50,000 direct labor hours and incur $1,000,000 of direct labor cost next year. Inaddition, the machines are expected to be run for 40,000 hours. Compute the prede-termined manufacturing overhead rate for next year under the following independentsituations:1. Assume that the company uses direct labor hours as its manufacturing overheadallocation base.2. Assume that the company uses direct labor cost as its manufacturing overheadallocation base.3. Assume that the company uses machine hours as its manufacturing overheadallocation base.

S3-6 1. Manufacturing overhead rate =Total estimated amount of manufacturing overheadTotal estimated…

Answered: 53-6 Compute various manufacturing…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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?
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…
Jm. 158.
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
Cost Data for Managerial PurposesHaverhill Electronics (HE) has offered to supply the county government with one model of its security screening device at “cost plus 20 percent.” HE operates a manufacturing plant that can produce 22,000 devices per year, but it normally produces 20,000. The costs to produce 20,000 devices follow. Total Cost Cost perDeviceProduction costs: Materials $ 1,000,000 $ 50Labor 2,000,000 100Supplies and other costs that will vary with production 600,000 30Indirect cost that will not vary with production 600,000 30Variable marketing costs 400,000 20Administrative costs (will not vary with production) 1,200,000 60Totals $ 5,800,000 $290Based on these data, company management expects to receive $348 (= $290 × 120 percent) per device for those sold on this contract. After completing 200 devices, the company sent a bill (invoice) to the government for $69,600 (= 200 devices × $348 per device).The president…
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…
profile-image Student question Time to preview question: 00 : 08 : 51 The Epsilon Co. have a building, which houses three production department, Alpha, Beta and Gamma, and one service department Delta. The service department, Delta is wholly involved in working for the three production departments and it is estimated that department Alpa uses 50%, department Beta uses 30% and department Gamma uses 20% of the services of department Delta. The budgeted overhead for the four departments for a period were: REQUIRED: a. Apportion the costs to the departments on the most equitable bases and calculate the overhead absorption rate, based on labour hours, for all the production department.

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