Doris Company mfg a unique mobile spare product and the company uses a standard costing system and determines that it should take one hour of direct labor to produce one unit. Normal production capacity for the product is 120,000 units per year. The total budgeted overhead at normal capacity is 1,080,000 comprised of 360,000 of variable costs and 720,000 of fixed costs. The company applies overhead on the basis of direct labor hours. During the current year, it produced 76,600, worked 98,400 direct labor hours, and incurred variable overhead costs of 143,395 and fixed overhead costs of 602,095. Calculate: 1.Predetermined Overhead Rate 2.Compute the applied overhead for the year 3.Compute the total overhead variance.

Doris Company mfg a unique mobile spare product and the company uses a standard costing system and determines that it should take one hour of direct labor to produce one unit. Normal production capacity for the product is 120,000 units per year. The total budgeted overhead at normal capacity is 1,080,000 comprised of 360,000 of variable costs and 720,000 of fixed costs. The company applies overhead on the basis of direct labor hours. During the current year, it produced 76,600, worked 98,400 direct labor hours, and incurred variable overhead costs of 143,395 and fixed overhead costs of 602,095. Calculate: 1.Predetermined Overhead Rate 2.Compute the applied overhead for the year 3.Compute the total overhead variance.

Name: Doris Company mfg a unique mobile spare product and the company uses
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Doris Company mfg a unique mobile spare product and the company uses a standard costing system anddetermines that it should take one hour of direct labor to produce one unit. Normal production capacityfor the product is 120,000 units per year. The t

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

Please help me. Thankyou.
Scott Corporation produces a part for use in the production of one of its products. The per-unit costs associated with the annual production of 1,000 units of this part are as follows: Direct Materials $10.50 $24.00 Direct labor Variable factory overhead $5.50 Fixed factory overhead $12.00 Total Costs $52.00 $5,000 of the fixed factory overhead costs associated with the production of this product are common fixed costs. Larson Company has offered to sell 1,000 units of the same part to Scott Corporation for $42 per unit. Scott should: Select one: a. buy the part, because this would save $10.00 per unit. X b. buy the part, because this would save the company $5,000 annually. c. make the part, because this would save the company $5,000 annually. d. make the part, because this would save $2.00 per unit.
Alpesh
Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 24 $ 12 Direct labor 23 26 Variable manufacturing overhead 22 12 Traceable fixed manufacturing overhead 23 25 Variable selling expenses 19 15 Common fixed expenses 22 17 Total cost per unit $ 133 $ 107 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? what is the alpha and beta
Sherman Manufacturing Company currently manufactures a component used in one of its products. The annual production costs for 11,300 components are as follows: Material cost Labor cost Overhead Batch-level set-up costs for year Product-level manager's salary Allocated facility-level costs $ 7 per unit $ 3 per unit $ 1 per unit $ 5,700 $ 17,700 $ 11,700 An outside company has offered to supply 11,300 units of the component for $14.40 each. If the company outsources the component, it will be able to rent out the idle factory space for $2,000 per month but will not terminate the product manager. Required: a. Which items are not relevant to this outsourcing decision? b. Identify any opportunity costs associated with this decision. c. Prepare a quantitative analysis that indicates whether the component should be outsourced. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a quantitative analysis that indicates whether the component…
Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Alpha Beta Direct materials $ 24 $ 12 Direct labor 23 26 Variable manufacturing overhead 22 12 Traceable fixed manufacturing overhead 23 25 Variable selling expenses 19 15 Common fixed expenses 22 17 Total cost per unit $ 133 $ 107 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 2. What is the company’s total amount of common fixed expenses? 3. Assume that Cane expects to produce and sell 87,000 Alphas during the current year. One of Cane's sales representatives has found a…
GEM Limited has a single product Flicks. The company normally produces and sells 80,000units of Flicks each year at a price of $240 per unit. The company’s unit costs at this level ofactivity are as follow:Direct material $57.00Direct labor 60.00Variable manufacturing overhead 16.80Fixed manufacturing overhead 30.00Variable selling and administrative costs 10.20Fixed selling and administrative costs 27.00 Total unit cost $201.00GEM has sufficient capacity to produce 100 000 units of Flicks a year without any increase infixed manufacturing overhead.Required:(a) GEM has an opportunity to sell 10 000 units to an overseas customer. Import duties andother special costs associated with this order would total $42 000. The only selling coststhat would be associated with the order would be a shipping cost of $9.00 per unit.What would be the minimum acceptable unit price for GEM to consider this order?(hint: GEM would not accept the order if it would reduce the…
The Garvis Company uses an absorption-costing system based on standard costs. Variable manufacturing cost consists of direct material cost of $4.50 per unit and other variable manufacturing costs of $1.50 per unit. The standard production rate is 20 units per machinehour. Total budgeted and actual fixed manufacturing overhead costs are $840,000. Fixed manufacturing overhead is allocated at $14 per machine-hour based on fixed manufacturing costs of $840,000 , 60,000 machine-hours, which is the level Garvis uses as its denominator level. The selling price is $10 per unit. Variable operating (nonmanufacturing) cost, which is driven by units sold, is $2 per unit. Fixed operating (nonmanufacturing) costs are $240,000. Beginning inventory in 2017 is 60,000 units; ending inventory is 80,000 units. Sales in 2017 are 1,080,000 units. The same standard unit costs persisted throughout 2016 and 2017. For simplicity, assume that there are no price, spending, or efficiency variances. Q. The…
What is the correct answer for this question?