Adriana Corporation manufactures football equipment. In planning for next year, the managerswant to understand the relation between activity and overhead costs. Discussions with the plantsupervisor suggest that overhead seems to vary with labor-hours, machine-hours, or both. Thefollowing data were collected from last year's operations:Month Labor-Machine-Overhead CostsHoursHours17301,363$ 102,7517251,400103,87136851,518109,88447501,458108,3057801,591116,1277651,589114,51677301,391106,92987251,301102,0827051,459106,469107901,555113,132116701,294100,528127051,612113,089 Required:(a) Use the high-low method to estimate the fixed and variable portions of overhead costsbased on machine-hours. (Round your variable cost answer to 2 decimal places. Omit the"$" sign in your response.)Variable cost (per machine hour)Fixed cost(b) Managers expect the plant to operate at a monthly average of 1,600 machine-hours nextyear. What are the estimated monthly overhead costs, assuming no inflation? (Use roundedvariable cost. Omit the "$" sign in your response.)Overhead costs

STEP 1 Under high low method the variable cost is calculated as the difference of the highest cost…

Adriana Corporation manufactures football equipment. In planning for n want to understand the relation between activity and overhead costs. Di supervisor suggest that overhead seems to vary with labor-hours, machi following data were collected from last year's operations: Month Labor- Machine- Overhead Costs Hours Hours 1 730 1,363 102,751 2 725 1,400 103,871

Adriana Corporation manufactures football equipment. In planning for n want to understand the relation between activity and overhead costs. Di supervisor suggest that overhead seems to vary with labor-hours, machi following data were collected from last year's operations: Month Labor- Machine- Overhead Costs Hours Hours 1 730 1,363 102,751 2 725 1,400 103,871

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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Question: Use the high-low method to determine the estimating cost function with machine-hours as the cost If July's estimated machine-hours are 4,500, calculate the total estimated operating costs of the Machining Department using the cost function in (a)? Max has used least squares regression analysis to obtain the following output:
1. Calculate the overhead rate based on the traditional overhead allocation method using direct labour hours as the base. 2. Calculate the total overhead applied to order no. 147 using the traditional overhead rate calculated in question 3.1 above. 3. Using activity based costing (ABC), calculate the overhead rate for the following activity: Purchasing. That is, what is the overhead rate per purchase order?
Required:i) Using the above information derive a cost function that can be used to predict the total production overheads cost using the high-low cost estimation method.
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3. Application of Overhead Costs 3A) CMA Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. Estimated and actual data for direct labor and manufacturing overhead last year are as follows: Manufacturing overhead Direct labor hours Estimated P 720,000 600,000 What was the manufacturing overhead for CMA Company for last year? a. Over-applied by P 20,000 c. Over-applied by P 40,000 d. Under-applied by P 40,000 b. Under-applied by P 20,000 Activity 1 Activity 2 Activity 3 3B) CIA Company uses activity-based costing to compute product costs for external reports. The company has three activity centers and applies overhead using predetermined overhead rates for each activity center. Estimated costs and activities for the current year are presented below: Estimated Overhead Cost Expected Activity P 18,000 P 57,600 P 97,200 Actual costs and activities for the current year were as follows: Activity 1 Activity 2 Activity 3 Actual P…
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Sunland Co. gathered the following information on power costs and factory machine usage for the last six months: Power Cost Factory Machine Hours $28,390 15,800 36,069 21,400 32,895 18,700 ITT 26,235 15,100 23,890 13,500 20,700 Month January February March April May June Using the high-low method of analyzing costs, answer the following questions and show computations to support your answers. (a) Your answer is correct. What is the estimated variable portion of power costs per factory machine hour? (Round answer to 2 decimal places, e.g. 15.25.) Variable power costs $ (b) eTextbook and Media * Your answer is incorrect. 10.500 Fixed power costs What is the estimated fixed power cost each month? High 1.41 per factory machine hour 20,683 $ Low Attempts: 1 of 5 used
Required: a. Calculate the overhead analysis of each of the two production departments for 2003.
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The Wonder Drug Company's total overhead costs at various levels of activity are presented below: Month September October November December Assume that the overhead costs above consist of indirect labor, scheduling salaries, and maintenance. The breakdown of these costs for the month of November is as follows: Indirect labor (V) Maintenance (M) Scheduling Salaries (F) a. Direct Labor Hours 15,000 12,000 18,000 21,000 Total Overhead Direct Labor Hours High Required: (a.) Using the high-low method, determine the cost formula for maintenance. (b.) Express the company's total overhead costs in linear equation form. $ 21,000 $ 219,600 197,400 125,000 542,000 Low 12,000 Total Overhead $ 472,000 409,400 542,000 604,700 Difference
Problem Factory overhead rate and application. Faye Company produces electric hairdryers. Because variable overhead expense is closely related to hours worked, the company uses the direct labor hours method of applying factory overhead. The following data pertain to a recent accounting period: [IMAGE] Required: Determine the following: (1) The predetermined factory overhead rate. (2) The applied factory overhead. (3) The over- or underapplied factory overhead.
Knight Company reports the following costs and expenses in May. Factory utilities Depreciation on factory equipment Depreciation on delivery trucks Indirect factory labor Indirect materials Direct materials used Factory manager's salary From the information: (b) (a) Your answer is correct. Manufacturing overhead eTextbook and Media Determine the total amount of manufacturing overhead. $15,500 12,650 3,800 48,900 80,800 137,600 Product costs Determine the total amount of product costs. Save for Later Direct labor Sales salaries Property taxes on factory building Repairs to office equipment Factory repairs Advertising 8,000 Office supplies used 170350 $69,100 46,400 2,500 1,300 2,000 15,000 2,640 Attempts: 1 of 5 used Attempts: 0 of 5 used Submit Answer