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 estimatedoverhead and direct labor hours.DirectProductOverheadLabor Hours (dlh)APainting Dept.$383,13012,900 dlh16 dlh6 dlhFinishing Dept.86,0347,80016Totals$469,16420,700 dlh21 dlh22 dlhThe overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses the multiple production department factoryoverhead rate method isOa. S11.03 per unitOb. $354.68 per unitOc. S29.70 per unitOd. S530.35 per unit

Departmental overhead rate = Estimated overhead costs/ Estimated labour hours

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 Product Overhead Labor Hours (dlh) A B Painting Dept. $383,130 12,900 dlh 16 dlh 6 dlh Finishing Dept. 86,034 7,800 16 Totals $469,164 20,700 dlh 21 dlh 22 dlh The overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is Oa. S11.03 per unit Ob. $354.68 per unit Oc. S29.70 per unit Od. $530.35 per unit

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 Product Overhead Labor Hours (dlh) A B Painting Dept. $383,130 12,900 dlh 16 dlh 6 dlh Finishing Dept. 86,034 7,800 16 Totals $469,164 20,700 dlh 21 dlh 22 dlh The overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is Oa. S11.03 per unit Ob. $354.68 per unit Oc. S29.70 per unit Od. $530.35 per unit

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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Adirondack 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. Painting Dept. Finishing Dept. Totals Overhead $254,100 80,200 $334,300 Ob. $2.07 per dlh Oc. $7.71 per dlh Od. $24.20 per dlh Total Direct Labor Hours 10,500 10,400 20,900 DLH per Product A 9 6 15 B 10 The single plantwide factory overhead rate for Adirondack Marketing Inc. is Oa. $16.00 per dlh 6 16
Adirondack 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. Total DLH per Product Direct Overhead Labor Hours B Painting Dept. $248,400 10,300 Finishing Dept. 65,700 10,000 6 Totals $314,100 20,300 11 12 The single plantwide factory overhead rate for Adirondack Marketing Inc. is Oa. $6.57 per dlh Ob. $15.47 per dlh Oc. $2.09 per dlh Od. $24.12 per dlh
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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…
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Overhead Applied to Jobs, Departmental Overhead Rates Xania Inc. uses a normal job-order costing system. Currently, a plantwide overhead rate based on machine hours is used. Xania's plant manager has heard that departmental overhead rates can offer significantly better cost assignments than a plantwide rate can offer. Xania has the following data for its two departments for the coming year: Overhead costs (expected) Normal activity (machine hours) Required: Department A Department B 1. Compute a predetermined overhead rate for the plant as a whole based on machine hours. Round your answer to two decimal places. 5.75 ✔per machine hour Plantwide 2. Compute predetermined overhead rates for each department using machine hours. (Note: Round to two decimal places, if necessary.) 8.28 ✔ per machine hour 2.89✔ per machine hour Departmental $ 3. Conceptual Connection: Job 73 used 20 machine hours from Department A and 50 machine hours from Department B. Job 74 used 50 machine hours from…
The year end balance sheet of CP, In., include the following stockholders’ equity section (with certain details omitted). Stockholders’ equity: Capital stock: 7% cumulative preferred stock, $100 par value……………. $15,000,000 Common stock, $5 par value, 5,000,000 shares Authorized, 4,000,000 shares issued and outstanding…… 20,000,000 Additional paid in capital: Common stock……………………………………………………………… 44,000,000 Retained earnings………………………………………………………… 64,450,000 Total stockholders’ equity…………………………………………… $143,450,000 From this information, I must compute the answers to the following question. How many shares of preferred have been issued? What is the total amount of the annual dividends to which preferred stockholders are entitled? What was the average issuance price per share common stock?
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Company A has two manufacturing departments - Department 1 and Department 2. It considers all of its manufacturing overhead costs to be fixed costs. Estimations for the begining of the year is presented in the Table 1. During the year Job 1 was started and completed. Information on Job 1 is provided in the Table 2. Table 1 Items Manufacturing overhead costs (€) Direct labour-hours Machine-hours Department 1 Department 2 Total 1600 1200 2800 100 60 160 20 80 100 Table 2 Items Direct labour-hours Machine-hours Direct materials (€) Direct labour costs (€) Department 1 Department 2 Total 55 15 70 15 30 45 320 740 1060 450 120 570 Company A uses departmental (multiple) predetermined overhead rates with direct labor - hours as the allocation base in Department 1 and machine - hours as the allocation base in Department 2. Compute the predetermined overhead rate of the Department 2.