A local manufacturing company estimated the following expenses for the upcoming year: a. Insurance on factory: $100,000 b. Factory security: 1 guard at $20/hour for a 2,000 hour work year c. 1 production supervisor at $90,000/year d. Repair/Maintenance Technicians: 2 technicians at $40/hour each for a 2,000 hour work year e. Depreciation: $25/machine hour f. Utilities: $7/machine hour The company applies overhead on the basis of machine hours. Required: · Build the cost formula · Assume one unit of output takes 2 machine hours, and the estimated production for the year is 20,000 units o Calculate the expected number of machine hours to be used in the year. o Calculate the estimated total manufacturing overhead cost. o Calculate the applied overhead rate per machine hour.
A local manufacturing company estimated the following expenses for the upcoming year:
a. Insurance on factory: $100,000
b. Factory security: 1 guard at $20/hour for a 2,000 hour work year
c. 1 production supervisor at $90,000/year
d. Repair/Maintenance Technicians: 2 technicians at $40/hour each for a 2,000 hour work year
e.
f. Utilities: $7/machine hour
The company applies
Required:
· Build the cost formula
· Assume one unit of output takes 2 machine hours, and the estimated production for the year is 20,000 units
o Calculate the expected number of machine hours to be used in the year.
o Calculate the estimated total
o Calculate the applied overhead rate per machine hour.
o Calculate the applied overhead per unit of output.
Workings:
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