Blue FurnitureBlue Furniture has identified activity centers to which overhead costs are assigned. The company's actualcombined direct labor hours for chairs, cabinets, and tables (job batch #732) is 500 hours. The following datais available:Activity CentersCostsActivity DriversUtilitiesScheduling and SetupMaterial HandlingP500,000 50,000 machine hours480,000 800 setups931,000 1,900,000 pounds of materialsThe company's estimated products and annual operating statistics are the following:A. ChairsB. CabinetsC. TablesP160,00020,000150P140,00015,000250500,00055,00036,000P180,00015,000Prime costsMachine hoursNumber of setups400Pounds of materials600,00065,00045,000800,00070,00060,000Number of units producedDirect labor hoursProvide the following:A. Compute for the pool rates and overhead cost allocated to each product of Blue Furniture.B. Using the allocated total overhead cost in the previous item, as the budgeted annual overhead,compute for the combined overhead cost applied to job #732. Show your solution using normalcosting and illustrate the journal entry of the calculated overhead cost.

Predetermined overhead rate is used to calculate the estimated overhead. It shows the rate at which…

Blue Furniture Blue Furniture has identified activity centers to which overhead costs are assigned. The company's actual combined direct labor hours for chairs, cabinets, and tables (job batch #732) is 500 hours. The following data is available: Activity Centers Costs Activity Drivers Utilities P500,000 50,000 machine hours Scheduling and Setup Material Handling 480,000 800 setups 931,000 1,900,000 pounds of materials The company's estimated products and annual operating statistics are the following: C. Tables P180,000 15,000 400 A. Chairs B. Cabinets P140,000 15,000 Prime costs P160,000 20,000 Machine hours Number of setups Pounds of materials 150 250 600,000 65,000 500,000 800,000 70,000 60,000 Number of units produced 55,000 36,000 Direct labor hours 45,000 Provide the following: A. Compute for the pool rates and overhead cost allocated to each product of Blue Furniture. B. Using the allocated total overhead cost in the previous item, as the budgeted annual overhead, compute for the combined overhead cost applied to job #732. Show your solution using normal costing and illustrate the journal entry of the calculated overhead cost.

Blue Furniture Blue Furniture has identified activity centers to which overhead costs are assigned. The company's actual combined direct labor hours for chairs, cabinets, and tables (job batch #732) is 500 hours. The following data is available: Activity Centers Costs Activity Drivers Utilities P500,000 50,000 machine hours Scheduling and Setup Material Handling 480,000 800 setups 931,000 1,900,000 pounds of materials The company's estimated products and annual operating statistics are the following: C. Tables P180,000 15,000 400 A. Chairs B. Cabinets P140,000 15,000 Prime costs P160,000 20,000 Machine hours Number of setups Pounds of materials 150 250 600,000 65,000 500,000 800,000 70,000 60,000 Number of units produced 55,000 36,000 Direct labor hours 45,000 Provide the following: A. Compute for the pool rates and overhead cost allocated to each product of Blue Furniture. B. Using the allocated total overhead cost in the previous item, as the budgeted annual overhead, compute for the combined overhead cost applied to job #732. Show your solution using normal costing and illustrate the journal entry of the calculated overhead cost.

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

sharad
A company allocates $7.50 of overhead per direct labor hour to products. The company uses a plantwide overhead rate with direct labor hours as the allocation base. Given the amounts below, how many direct labor hours does the company expect in department 2? Budgeted: Department 1 Department 2 Manufacturing overhead costs $ 74,358 $ 49,572 Direct labor hours 6,610 DLH ? DLH Machine hours 700 MH 800 MH
Practice Example 1: White Company has two departments, Cutting and Finishing. The company uses a job-order cost system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor cost. At the beginning of the year, the company made the following estimates: Department Direct labor-hours Machine-hours Manufacturing overhead cost Direct labour cost Cutting 6,000 48,000 Rs360,000 Rs50,000 Finishing 30,000 5,000 Rs486,000 Rs270,000 Required: 1. Compute the predetermined overhead rate to be used in each department. 2. Assume that the overhead rates that you computed in (1) above are in effect. The job cost sheet for job 203, which was started and completed during the year, showed the following: Cutting 6 80 Rs500 Rs70 Department Finishing 20 4 Rs310 Rs150 Direct labor-hours Machine-hours Materials requisitioned Direct labor cost Compute the total overhead cost applied to Job…
Vikrambahi
Data concerning three of Kilmon Corporation’s activity cost pools appear below: Activity Cost Pools Estimated Overhead Cost Expected Activity Assembling products $ 65,540 4,520 assembly hours Designing products $ 578,112 3,011 product design hours Setting up batches $ 41,820 820 batch set-ups Required: Compute the activity rates for each of the three cost pools. (Round your answers to 2 decimal places.) Activities Activity rate Assembly products Designing products Setting up batches
Foster Florist specializes in large floral bouquets for hotels and other commercial spaces. The company has provided the following data concerning its annual overhead costs and its activity based costing system: Overhead costs: Wages and salaries $ 178,000 Other expenses 51,000 Total $ 229,000 Distribution of resource consumption: Activity Cost Pools Total Making Bouquets Delivery Other Wages and salaries 45% 20% 35% 100% Other expenses 30% 65% 5% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows: Activity Cost Pool Activity Making bouquets 46,995 bouquets Delivery 11,800 deliveries What would be the total overhead cost per delivery according to the activity based costing system? In other words, what would be the overall activity rate for the deliveries activity cost pool? Note: Round to the nearest whole cent. Multiple Choice $5.83 $6.69 $4.12 $5.40
Munabhai
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
Saratoga Company manufactures jobs to customer specifications. The company is conducting a time-driven activity-based costing study in its Purchasing Department to better understand how Purchasing Department labor costs are consumed by individual jobs. To aid the study, the company provided the following data regarding its Purchasing Department and three of its many jobs: Number of employees Average salary per employee 11 $ 27,000 Weeks of employment per year Hours worked per week 52 40 Practical capacity percentage 85% Requisition Minutes per unit of the activity Processing 15 Bid Evaluation Inspection 45 30 Job X Job Y Job Z Number of requisitions processed Number of bid evaluations 6 3 2 4 3 5 Number of inspections 7 3 7 Now assume that Saratoga Company would like to answer the following "what if" question using its time-driven activity-based costing system: Assuming our estimated activity demands for all jobs in the next period will be as shown below, how will this affect our job…
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. Direct Overhead Labor Hours (dlh) $248,000 72,000 $320,000 10,000 dlh 10,000 20,000 dlh Product A Painting Dept. Finishing Dept. Totals Using a single plantwide rate, the factory overhead allocated per unit of Product B is O a. $640 O b. $496 O c. $320 C. O d. $144 16 dlh 4 Product B 4 dlh 20 dlh 16 20 dlh Ⓒ
Paparo Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost $ 888,300 Assembly Processing orders $ 60,560 Inspection $ 101,572 Data concerning the company's product Q79Y appear below: Annual unit production and sales Annual machine-hours Annual number of orders Annual inspection hours Direct materials cost Direct labor cost Multiple Choice Total Activity 54,000 machine-hours 1,600 orders: 1,340 inspection-hours O $144.43 per unit 600 1,040 70 45 According to the activity-based costing system, the average cost of product Q79Y is closest to: (Round your intermediate calculations to 2 decimal places.) $49.00 per unit $ 41.13 per unit
Vishu