Adirondack Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to product However, management is considering moving to a multiple department rate system for allocating overhead. Painting Dept. Finishing Dept. Totals Overhead $248,300 73,300 $321,600 Total Direct Labor Hours 10,200 10,000 20,200 DLH per Product A 3 4 7 DLH per Product B 9 3 12 The single plantwide factory overhead rate for Adirondack Marketing Inc. is a. $2.71 per dlh Ob. $7.33 per dlh Oc. $24.34 per dlh Od. $15.92 per dlh

Adirondack Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to product However, management is considering moving to a multiple department rate system for allocating overhead. Painting Dept. Finishing Dept. Totals Overhead $248,300 73,300 $321,600 Total Direct Labor Hours 10,200 10,000 20,200 DLH per Product A 3 4 7 DLH per Product B 9 3 12 The single plantwide factory overhead rate for Adirondack Marketing Inc. is a. $2.71 per dlh Ob. $7.33 per dlh Oc. $24.34 per dlh Od. $15.92 per dlh

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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Adirondack Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. Overhead TotalDirectLabor Hours DLH per Product A B Painting Dept. $251,500 11,000 7 7 Finishing Dept. 73,000 10,600 2 3 Totals $324,500 21,600 9 10 The single plantwide factory overhead rate for Adirondack Marketing Inc. is
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Solomon Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 78, 300 $ 28,910 $ 15,000 $ 180,000 Cost driver 2,700 labor hours 49 setups Percentage of use 18,000 units Production of 730 sets of cutting shears, one of the company's 20 products, took 180 labor hours and 5 setups and consumed 16 percent of the product - sustaining activities. Required Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? How much overhead is allocated to the cutting shears using activity-based costing? Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 730 units…
Multiple Production Department Factory Overhead Rate Method Four Finger Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster ovens. Four Finger Appliance presently uses the multiple production department factory overhead rate method. The factory overhead is as follows: Assembly Department Test and Pack Department Total The direct labor information for the production of 7,500 units of each product is as follows: Blender Toaster oven Total $186,000 120,000 $306,000 Assembly Department Test and Pack Department 750 dih 2,250 dlh 750 Product Blender 2,250 3,000 dih Four Finger Appliance used direct labor hours to allocate production department factory overhead to products. Toaster oven 3,000 dlh If required, round all per unit answers to the nearest cent. a. Determine the two production department factory overhead rates. Assembly Department Test and Pack Department b. Determine the total factory overhead and the factory overhead per unit…
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Adirondack Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. Painting Dept. Finishing Dept. Totals Overhead $254,100 80,200 $334,300 Ob. $2.07 per dlh Oc. $7.71 per dlh Od. $24.20 per dlh Total Direct Labor Hours 10,500 10,400 20,900 DLH per Product A 9 6 15 B 10 The single plantwide factory overhead rate for Adirondack Marketing Inc. is Oa. $16.00 per dlh 6 16
Required information Greenwood Company manufactures two products-15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machining Number of setups Number of products Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Cost $ 227,700 $ 153,908 Product Y Product Z 8,700 60 1 8,700 2,300 210 1 1,300 Expected Activity 11,000 MHS 270 setups $ 91,000. $ 257,000 2 products 10,000 DLHS 14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? (Round your answers to 2…
Adirondack Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. Total DLH per Product Direct Overhead Labor Hours B Painting Dept. $248,400 10,300 Finishing Dept. 65,700 10,000 6 Totals $314,100 20,300 11 12 The single plantwide factory overhead rate for Adirondack Marketing Inc. is Oa. $6.57 per dlh Ob. $15.47 per dlh Oc. $2.09 per dlh Od. $24.12 per dlh
Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead Total costs Standard 29,700 17,820 22,275 $ 594,000 356,400 Predetermined overhead rate Enhanced 9,900 11,880 22,275 $ 891,000 757,350 Total Required: Compute the predetermined overhead rate assuming that Redfern Audio uses direct labor costs to allocate overhead costs. Note: Round your answer to 2 decimal places. % of direct labor cost 39,600 29,700 44,550 $ 1,485,000 1,113,750 730, 620 $ 3,329,370
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Franklin Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Cost Cost driver Req A and B Unit Level $ 62,400 2,400 labor hours Req C Allocated overhead Direct cost Total cost per unit Desired profit Sales price Production of 710 sets of cutting shears, one of the company's 20 products, took 170 labor hours and 6 setups and consumed 15 percent of the product-sustaining activities. Complete this question by entering your answers in the tabs below. Required a. Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using…
Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. Painting Dept. Finishing Dept. Totals Overhead $257,800 76,100 $333,900 Direct Labor Hours (dlh) 10,200 dlh 11,700 21,900 dlh Using a single plantwide rate, the factory overhead alloca Oa. $15.25 Ob. $151.65 Oc. $152.50 d. $244.00 Product A 6 dlh 4 10 dlh ed per unit B 10 dlh 6 16 dlh Product B is