Christmas Timber, Inc., produces Christmas trees. The trees are produced through acutting and pruning process. Machine maintenance and janitorial labors are performedthroughout the production process by nonproduction employees. Maintenance andjanitorial costs are allocated based on machine hours used and the number of trees ineach department, respectively. The company estimates that the cutting and pruning areastypically have about 20 and 60 trees, respectively, in them at one time. The company alsoestimates that the cutting process requires about 9 times as many machine hours as thepruning process. The total costs of each department are as follows:Maintenance Department$ 7,800Janitorial Department5,000Cutting Department54,500Pruning Department11,000

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Answered: Christmas Timber, Inc., produces…

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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Carson Paint Company, which manufactures quality paint to sell at premium prices, uses a single production department. Production begins by blending the various chemicals that are added at the beginning of the process and ends by filling the paint cans. The gallon cans are then transferred to the shipping department for crating and shipment. Direct labor and overhead are added continuously throughout the process. Factory overhead is applied at the rate of $3 per direct labor dollar. The company combines direct labor and overhead in computing product cost. Prior to May, when a change in the manufacturing process was implemented, Work - in - Process Inventories were insignificant. The changed manufacturing process, which has resulted in increased equipment capacity, allows increased production but also results in considerable amounts of Work-in - Process Inventory. Also, the company had 1,000 spoiled gallons in May-one-half of which was normal spoilage and the rest abnormal spoilage. The…
Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Number of Direct Labor Hours Per Unit Product Units Blinks Dinks 1,101 2,269 3 4 Machine Hours Per Unit 8 5 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $80,200. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $102,700. Ramapo Company uses a single plantwide overhead rate to apply all factory overhead costs based on direct labor hours. The factory overhead allocated per unit of Blinks is Oa. $308.12 Ob. $23.17 Oc. $44.34 Od. $59.10
Support Department Cost Allocation-Direct Method Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 36 and 54 trees, respectively, in them at 1 time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows: Maintenance Department Janitorial Department $7,000 4,000 Cutting Department Pruning Department 52,000 13,000 Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all support costs to the production…
Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below. Product Number of Units Rings 910 3 Dings 2,270 9 All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $85,800. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $70,800. Direct Labor Hours per Unit 6 5 Oc. $3.70 per direct labor hour Od. $4.21 per direct labor hour Machine Hours per Unit Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours. The Assembly Department's factory overhead rate is Oa. $4.48 per machine hour Ob. $4.10 per machine hour
Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below. Product Number ofUnits Direct Labor HoursPer Unit Machine HoursPer Unit Rings 1,120 5 5 Dings 2,320 7 7 All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $84,400. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $70,600. Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours. The total factory overhead allocated per unit of Dings is a.$49.63 b.$35.45 c.$45.06 d.$3.75
Support Department Cost Allocation-Direct Method Christmas Timber, Inc., produces Christmas trees. The trees are produced through a cutting and pruning process. Machine maintenance and janitorial labors are performed throughout the production process by nonproduction employees. Maintenance and janitorial costs are allocated based on machine hours used and the number of trees in each department, respectively. The company estimates that the cutting and pruning areas typically have about 16 and 64 trees, respectively, in them at 1 time. The company also estimates that the cutting process requires about 9 times as many machine hours as the pruning process. The total costs of each department are as follows: Maintenance Department $7,000 Janitorial Department 4,000 Cutting Department 56,000 Pruning Department 9,000 Using the direct method of support department cost allocation, determine the total cost of each production department after allocating all support costs to the production…
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Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below. Product Number ofUnits Direct Labor HoursPer Unit Machine HoursPer Unit Rings 1,000 5 7 Dings 2,740 7 10 All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $89,300. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $65,100. Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours. The total factory overhead allocated per unit of Rings is a.$31.65 b.$3.44 c.$44.83 d.$41.28
Hartley Uniforms produces uniforms. The company allocates manufacturing overhead based on the machine hours each job uses. Hartley Uniforms reports the following cost data for the past year: Budget Actual 7,600 hours 6,100 hours Direct labor hours Machine hours 7,200 hours 6,300 hours Depreciation on salespeople's autos $23,000 $23,000 Indirect materials $48,500 $50,500 Depreciation on trucks used to deliver uniforms to customers solla $13,000 $70,000 $40,000 $11,000 Depreciation on plant and equipment Indirect manufacturing labor $72,500 $42,000 Customer service hotline $19,000 $21,000 Plant utilities $35,900 $38,400 Direct labor cost $72,500 $85,500 Requirements 1odel tba 1. Compute the predetermined manufacturing overhead rate. 2. Calculate the allocated manufacturing overhead for the past year. 3. Compute the underallocated or overallocated manufacturing overhead. How will this underallocated or overallocated manufacturing overhead be disposed of? 4. How can managers usA acco
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