Assembly DepartmentTotal Direct Labor Hours per Unit25.5 dlh3.55.5 dlha. Determine the per-unit factory overhead allocated to the gasoline and diesel enginesunder the single plantwide factory overhead rate method, using direct labor hours asthe activity base.b. Determine the per-unit factory overhead allocated to the gasoline and diesel enginesunder the multiple production department factory overhead rate method, using directlabor hours as the activity base for each department.c. Recommend to management a product costing approach, based on your analyses in (a)and (b). Support your recommendation. 5. The management of Firebolt Industries Inc. manufactures gasoline and diesel engines throughtwo production departments, Fabrication and Assembly. Management needs accurate productcost information in order to guide product strategy. Presently, the company uses a singleplantwide factory overhead rate for allocating factory overhead to the two products. However,management is considering the multiple production department factory overhead rate method.The following factory overhead was budgeted for Firebolt:DepartmentFabrication DepartmentAssembly DepartmentTotal OverheadDirect labor hours were estimated as follows:DepartmentFabrication DepartmentAssembly DepartmentTotal Direct Labor Hours10Production DepartmentsFabrication DepartmentAssembly DepartmentTotal Direct Labor Hours per UnitDollar Amount$550,000250,000800,000Direct Labor HoursIn addition, the direct labor hours (dlh) used to produce a unit of each product in eachdepartment were determined from engineering records, as follows:Gasoline Engine3.5 dlh25.5 dlh5,0005,00010,000Diesel Engine2 dlh3.55.5 dlhUkDetermine the per-unit factory overhead allocated to the gasoline and diesel enginesunder the single plantwide factory overhead rate method, using direct labor hours asthe activity base.

Assembly Department Total Direct Labor Hours per Unit 2 5.5 dlh 3.5 5.5 dlh a. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the single plantwide factory overhead rate method, using direct labor hours as the activity base. b. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the multiple production department factory overhead rate method, using direct labor hours as the activity base for each department. c. Recommend to management a product costing approach, based on your analyses in (a) and (b). Support your recommendation.

Assembly Department Total Direct Labor Hours per Unit 2 5.5 dlh 3.5 5.5 dlh a. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the single plantwide factory overhead rate method, using direct labor hours as the activity base. b. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the multiple production department factory overhead rate method, using direct labor hours as the activity base for each department. c. Recommend to management a product costing approach, based on your analyses in (a) and (b). Support your recommendation.

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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Exercise 4-4
Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion The management of Nova Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production department factory overhead rate method. The following factory overhead was budgeted for Nova: $765,000 315,000 $1,080,000 Fabrication Department factory overhead Assembly Department factory overhead Total Direct labor hours were estimated as follows: Fabrication Department Assembly Department Total In addition, the direct labor hours (dlh) used to produce a unit of each product in each department were determined from engineering records, as follows: Production Departments…
- Chapter Four Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machining Required information Greenwood Company manufactures two products-13,000 units of Product Y and 5,000 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: Number of setups Number of products Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Activity rate Saved Product Y Product Z 8,800 3,200 240 40 1 1 8,800 3,200 5. What is the activity rate for the Product Design activity cost pool? per product Save
Assigning indirect costs to departments is completed by ________. applying the predetermined overhead rate debiting the manufacturing costs incurred applying the costs to manufacturing overhead applying the costs to work in process inventory In a process costing system, which account shows the overhead assigned to the department? cost of goods sold • finished goods inventory raw material inventory work in process inventory A print shop produces custom paintings. It has received four different orders (a/B/C/D) The total cost for the four orders is labor $6000, materials $10,000 and overheads for 5,000. What processes/systems would you implement if you wanted to know the cost for each of the orders which are not similar.
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multiple production department factory i=overhead rate method perfomance Gloves,Inc. produces three size of sports gloves:small,medium and large.A glove pattern is first stenciled onto leather in the Pattern Department,where the gloves is cut and sewed together. Perfomance Gloves uses the multiple production department factiey overhead rate methid of allocating factory overhead costs.Its factory overhead costs were budgeted as follows: The direct labor estimated for each production department was as follows: Direct labor hours are used to allocate the production department overhead to the products.The direct labor hours per unit for each product for eacg production department were obtained from the engineering records as follows: a) Determine the two production department factory overhead rates. b) Use the two production department factory rates to detrmine the factory overhead per unit for each product.
Dengo Company makes a trail mix in two departments: Roasting and Blending. Direct materials are added at the beginning of each process, and conversion costs are added evenly throughout each process. The company uses the FIFO method of process costing. October data for the Roasting department follow. Beginning work in process inventory Units started and completed Units completed and transferred out Ending work in process inventory Beginning work in process inventory Costs added this period Direct materials. Conversion Total costs to account for Units 4,400 20, 600 25,000 3,800 $314, 760 1,374,948 Direct Materials Conversion Percent Percent Complete Complete 100% 30% 100% $ 124,790 1,689, 708 $ 1,814, 498 70%