Problem Set: Module 3еBookGasoline engine $480V per unitDiesel engine2$480V per unitb. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the multiple production department factory overhead rate method, using direct laborhours as the activity base for each department.Gasoline engine $204X per unitDiesel engine$484X per unitc. Recommend to management a product costing approach, based on your analyses in (a) and (b).Management should select the multiple department- v factory overhead rate method of allocating overhead costs. The single plantwidefactory overhead ratemethod indicates that both products have the same factory overhead per unit. Each product uses the direct labor hours differently- V. Thus, themultiple departmentrate method avoids the cost distortions by accounting for the overhead in each production department separately Problem Set: Module 3еBookSingle Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost DistortionThe management of Nova Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurateproduct 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:Fabrication Department factory overhead$697,000Assembly Department factory overhead287,000Total$984,000Direct labor hours were estimated as follows:Fabrication Department4,100 hoursAssembly Department4,100Total8,200 hoursIn 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 DepartmentsGasoline Engine Diesel EngineFabrication Department1.20 dlh2.80 dlhAssembly Department2.801.20Direct labor hours per unit4.00 dlh4.00 dlha. 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 theactivity base.

Manufacturing overhead are indirect costs that need to be allocated to product to ensure that all…

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. Gasoline engine 204 X per unit Diesel engine 84 x per unit Recomme product costing approach haced on (a) and (h)

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. Gasoline engine 204 X per unit Diesel engine 84 x per unit Recomme product costing approach haced on (a) and (h)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

1. COMPUTE THE UNIT PRODUCT COST UNDER ABSORPTION COSTING 2. COMPUTE THE UNIT PRODUCT COST UNDER VARIABLE COSTING
Maglie Company manufactures two video game consoles: handheld and home. The handheld consoles are smaller and less expens than the home consoles. The company only recently began producing the home model. Since the introduction of the new product. profits have been steadily declining. Management believes that the accounting system is not accurately allocating costs to products particularly because sales of the new product have been increasing Management has asked you to investigate the cost allocation problem. You find that manufacturing overhead is currently assigned to products based on their direct labor costs. For your investigation, you have data from last year. Manufacturing overhead was $1,366,000 based on production of 340.000 handheld consoles and 89,000 home consoles. Direct labor and direct materials costs were as follows. Direct labor Materials Handheld $1,294, 500 790,000 Cost Driver Number of production runs Quality tests performed Shipping orders processed Total overhead…
Using the following data, determine the unit product cost under variable costing. Units produced 1,000 Direct materials $6 Direct labor $10 Fixed overhead $6,000 Variable overhead $6 Fixed selling and administrative $2,000 Variable selling and administrative $22 $24 $28 $30 $2
Given the following data, calculate product cost per unit under absorption costing. Direct labor Direct materials Variable overhead Fixed overhead Units produced per year Multiple Choice $28.00 per unit $28.60 per unit $30.00 per unit $30.90 per unit $ 17.00 per unit $ 11.00 per unit $ 0.90 per unit $ 100,000 50,000 units
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…
Please provide answer in text (Without image)
Question: Pat Company uses activity-based costing. The company has two products: A and B. The annual production and sales for Product A is 1,800 units and for Product B it's 1,050 units. There are three activity cost pools, with estimated costs and expected activity as follows: Activities Estimated Expected Activity Overhead Cost Product A Product Total B Activity 1 $46,775 1,300 1,200 2,500 Activity 2 $68,277 2,300 1,000 3,300 Activity 3 $82,502 The overhead cost per unit of Product A under activity-based costing is closest to: 720 700 1,420 A. $139.12 B. $68.28 C. $32.88 D. $63.19
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%
A company has the following overhead costs and activities: Estimated Expected Activity Product V Product W Product X Overhead Activities and Activity Measures Machine setups (setups) Processing customer orders (orders) Assembling products (assembly-hours) $9,178.00 Cost S7,234.50 $3,565.50 69 12 10 20 21 492 697 111 4. A company sells two products, one with sales of $10,000 and variable expenses of $2,500, another with sales of $46,000 and variable expenses of $15,420. Fixed expenses are $33,100. Breakeven point for the whole company is close to: А. 833,100 В. $22,900 C. $51,020 D. $48,676 A company that reduces the proportion of variable costs in its cost structure will: A. enjoys higher stability in profits. B. increase its profits more when the economy is good. C. have a loss more easily when the economy is bad. D. be indifferent. 5. 6. is normally recorded on any financial statement but irrelevant in decision making which is not. A. Sunk cost B. Incremental cost C. Differential…
B. Find the cost of a product Different costs are presented below Direct materials $ 5.00 per unit Indirect materials $ 2.00 per unit Direct labor $ 10.00 per hour Indirect labor $ 3.00 per hour Other variable indirect costs $ 6.00 per hour Other fixed indirect costs $ 10.00 per unit Commissions to sellers $ 4.00 per unit Variable administrative costs $ 6.00 per unit Fixed Administrative Costs $ 10.00 per unit 1. Determine the cost of making each unit. When it says hourly, it refers to hours of direct labor. It takes 15 minutes for the company to make each product. .