Benson Manufacturing Company produced 3,000 units of inventory in January Year 2. It expects to produce an additional 9,800 units during the remaining 11 months of the year. In other words, total production for Year 2 is estimated to be 12,800 units. Direct materials and direct labor costs are $71 and $53 per unit, respectively. Benson expects to incur the following manufacturing overhead costs during the Year 2 accounting period. Production supplies Supervisor salary Depreciation on equipment Utilities Rental fee on manufacturing facilities Required $ 5,800 182,000 135,000 33,000 332,200 a. Combine the individual overhead costs into a cost pool and calculate a predetermined overhead rate assuming the cost driver is number of units. b. Determine the cost of the 3,000 units of product made in January.

Benson Manufacturing Company produced 3,000 units of inventory in January Year 2. It expects to produce an additional 9,800 units during the remaining 11 months of the year. In other words, total production for Year 2 is estimated to be 12,800 units. Direct materials and direct labor costs are $71 and $53 per unit, respectively. Benson expects to incur the following manufacturing overhead costs during the Year 2 accounting period. Production supplies Supervisor salary Depreciation on equipment Utilities Rental fee on manufacturing facilities Required $ 5,800 182,000 135,000 33,000 332,200 a. Combine the individual overhead costs into a cost pool and calculate a predetermined overhead rate assuming the cost driver is number of units. b. Determine the cost of the 3,000 units of product made in January.

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

The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 2nd Quarter 1st Quarter 10,400 3rd Quarter 11,400 4th Quarter 12,400 Units to be produced 9,400 Each unit requires 0.25 direct labor-hours and direct laborers are paid $12.00 per hour. In addition, the variable manufacturing overhead rate is $1.70 per direct labor-hour. The fixed manufacturing overhead is $84,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $24,000 per quarter. Required: 1. Calculate the company's total estimated direct labor cost for each quarter of the the upcoming fiscal year and for the year as a whole. 2&3. Calculate the company's total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole.
Production workers for Benson Manufacturing Company provided 380 hours of labor in January and 660 hours in February. Benson expects to use 4,000 hours of labor during the year. The rental fee for the manufacturing facility is $16,000 per month. Required Based on this information, how much of the rental cost should be allocated to the products made in January and to those made in February? (Do not round intermediate calculations.) Month Allocated Cost January February
Walton Corporation estimated its overhead costs would be $23,400 per month except for January when it pays the $135,870 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $159,270 ($135,870 + $23,400). The company expected to use 7,500 direct labor hours per month except during July, August, and September when the company expected 9,800 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company's actual direct labor hours were the same as the estimated hours. The company made 3,750 units of product in each month except July, August, and September, in which it produced 4,900 units each month. Direct labor costs were $24.90 per unit, and direct materials costs were $11.10 per unit. Required a. Calculate a predetermined overhead rate based on direct labor hours. b. Determine the total allocated overhead cost for January, March, and August. c. Determine…
Campbell Manufacturing Company produced 1,400 units of inventory in January Year 2. It expects to produce an additional 9,000 units during the remaining 11 months of the year. In other words, total production for Year 2 is estimated to be 10,400 units. Direct materials and direct labor costs are $74 and $71 per unit, respectively. Campbell expects to incur the following manufacturing overhead costs during the Year 2 accounting period. Production supplies Supervisor salary Depreciation on equipment Utilities Rental fee on manufacturing facilities Required a. Combine the individual overhead costs into a cost pool and calculate a predetermined overhead rate assuming the cost driver is number of units. b. Determine the cost of the 1,400 units of product made in January. Complete this question by entering your answers in the tabs below. Required A Required B $6,500 186,000 126,000 17,000 223,500 Determine the cost of the 1,400 units of product made in January. Allocated Cost Indirect…
Cavy Company estimates that the factory overhead for the following year will be $2,034,500. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 31,300 hours. The machine hours for the month of April for all of the jobs were 2,830. If the actual factory overhead for April totaled $180,455, determine the over- or underapplied amount for the month. Enter the amount as a positive number.
The Thomlin Company forecasts that total overhead for the current year will be $11,764,000 with 180,000 total machine hours. Year to date, the actual overhead is $7,870,000 and the actual machine hours are 83,000 hours. If the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date), the overhead is Round the factory overhead rate to the nearest dollar before multiplying by the number of hours. a.$3,217,500 overapplied b.$3,217,500 underapplied c.$2,475,000 underapplied d.$2,475,000 overapplied
Thomlin Company forecasts that total overhead for the current year will be $11,176,000 with 183,000 total machine hours. Year to date, the actual overhead is $7,700,000 and the actual machine hours are 97,000 hours. The predetermined overhead rate based on machine hours is Round the factory overhead rate to the nearest dollar before multiplying by the number of hours.
Winston Company estimates that the factory overhead for the following year will be $943,800. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 36,300 hours. The total machine hours for the year were 54,500 hours. The actual factory overhead for the year was $1,437,000. Enter the amount as a positive number. a. Determine the total factory overhead amount applied. Round to the nearest dollar. b. Compute the over- or underapplied amount for the year. c. Journalize the entry to transfer the over- or underapplied factory overhead to cost of goods sold. If an amount box does not require an entry, leave it blank.
Winston Company estimates that the factory overhead for the following year will be $1,168,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 36,500 hours. The total machine hours for the year were 54,400 hours. The actual factory overhead for the year was $1,765,000. Enter the amount as a positive number. a. Determine the total factory overhead amount applied. Round to the nearest dollar.$fill in the blank f3300e016fa0008_1 b. Compute the over- or underapplied amount for the year.$fill in the blank f3300e016fa0008_2 c. Journalize the entry to transfer the over- or underapplied factory overhead to cost of goods sold. If an amount box does not require an entry, leave it blank. - Select - - Select - - Select - - Select -
Production workers for Zachary Manufacturing Company provided 4,300 hours of labor in January and 3,400 hours in February. The company, whose operation is labor intensive, expects to use 48,300 hours of labor during the year. Zachary paid a $111,090 annual premium on July 1 of the prior year for an insurance policy that covers the manufacturing facility for the following 12 months. Required Based on this information, how much of the insurance cost should be allocated to the products made in January and to those made in February? (Do not round intermediate calculations.)
Harrison, Inc. is preparing their budget for the upcoming year and requires a breakdown of the costs of power used in its factory into the fixed and variable components. They have determined the number of direct labor hours worked affects the cost of power. The following data on the cost of power used and direct labor hours worked are available for the last six months of this year: Month July August September October High-Low Method November December Total Cost of Power $ 14,850 15,400 16,370 19,800 17,600 18,500 $102.520 Direct Labor Hours 3,000 2,050 2,900 3,650 2,670 2,650 16.920 1. Assuming that Harrison uses the high-low method of analysis, calculate the cost function to be used to estimate the power costs. 2. They have determined that production needs will require 8,467 direct labor hours. Using the cost function calculated above, what is the estimated cost of power?
Johnson Electrical produces industrial ventilation fans. The company plans to manufacture 87,000 fans evenly over the next quarter at the following costs direct material, $1,740,000, direct labor, $522,000, variable production overhead, $639,450, and fixed production overhead. $960,000. The $960,000 amount includes $84,000 of straight-line depreciation and $105,000 of supervisory salaries Shortly after the conclusion of the quarter's first month, Johnson reported the following costs: Direct material Direct labor $ 554,600 159,300 Variable production overhead Depreciation 220,000 28,000 Supervisory salaries 37,600 Other fixed production overhead Total 252,000 $1,251,500 Dave Kellerman and his crews turned out 25,000 fans during the month a remarkable feat given that the firm's manufacturing plant was closed for several days because of storm damage and flooding Kellerman was especially pleased with the fact that overall financial performance for the period was favorable when compared…