Epsilon Manufacturing Company uses a predetemined manufacturing overhead rate based on apercentage of direct labor cost. At the beginning of 2018, they estimated total manufacturingoverhead costs at $1, 015,000, and they estimated total direct labor costs at $1, 400,000.The administration and selling overheads are to be absorbed in each job cost at 15% of productioncost. Distribution cost should be added to each job according to quotes from outside carriagecompanies.The company wishes to quote for job # W500. Data for the job are as follows:%23Direct materials costDirect labour costDirect labour hoursSpecial Design CostDistribution quote from haulage companyUnits of product producedS169.450$230,000400 hours$12,300$17,930250 cratesa) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for2018.b) How much manufacturing overhead was allocated to Job #W500?c) Calculate the total cost & quotation price of Job #W500, given that a margin of 25% is applied.d) How much was the production cost per unit (cost per crate) of finished product?

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Description: Epsilon Manufacturing Company uses a predetemined manufacturing overhead rate based on apercentage of direct labor cost. At the beginning of 2018, they estimated total manufacturingoverhead costs at $1, 015,000, and they estimated total direct labor

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Epsilon Manufacturing Company uses a predetemined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2018, they estimated total manufacturing overhead costs at $1, 015,000, and they estimated total direct labor costs at $1,400,000. The administration and selling overheads are to be absorbed in each job cost at 15% of production cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The company wishes to quote for job # W500. Data for the job are as follows: Direct materials cost Direct labour cost $169,450 $230,000 400 hours $12,300 $17.930 Direct labour hours Special Design Cost Distribution quote from haulage company Units of product produced 250 crates a) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for 2018. b) How much manufacturing overhead was allocated to Job #W500? c) Calculate the total cost & quotation price of Job #W500, given that a margin of 25% is applied. d) How much was the production cost per unit (cost per crate) of finished product?

Epsilon Manufacturing Company uses a predetemined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2018, they estimated total manufacturing overhead costs at $1, 015,000, and they estimated total direct labor costs at $1,400,000. The administration and selling overheads are to be absorbed in each job cost at 15% of production cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The company wishes to quote for job # W500. Data for the job are as follows: Direct materials cost Direct labour cost $169,450 $230,000 400 hours $12,300 $17.930 Direct labour hours Special Design Cost Distribution quote from haulage company Units of product produced 250 crates a) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for 2018. b) How much manufacturing overhead was allocated to Job #W500? c) Calculate the total cost & quotation price of Job #W500, given that a margin of 25% is applied. d) How much was the production cost per unit (cost per crate) of finished product?

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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A Company uses a job order costing system and estimated it will have direct materials cost of $86,000 and $100,000 of direct labor cost next year. The company estimates its overhead next year will be $69,000. It also expects to incur 28,600 machine hours. If the company bases applied overhead on machine hours, its predetermined overhead rate for the next period should be (roun your answer to two decimal places): O $1.45/MH. O $0.69/MH. $2.99 per MH. O $2.41 per MH.
[The following information applies to the questions displayed below.] Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 54,000 machine-hours would be required for the period’s estimated level of production. It also estimated $1,000,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4.00 per machine-hour. Because Delph has two manufacturing departments—Molding and Fabrication—it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following information to enable calculating departmental overhead rates: Molding Fabrication Total Machine-hours 23,000 31,000 54,000 Fixed manufacturing overhead cost $ 760,000 $ 240,000 $ 1,000,000 Variable manufacturing overhead cost per machine-hour $ 4.00 $ 1.00 During the year, the…
[The following information applies to the questions displayed below.] Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 54,000 machine-hours would be required for the period’s estimated level of production. It also estimated $1,000,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4.00 per machine-hour. Because Delph has two manufacturing departments—Molding and Fabrication—it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following information to enable calculating departmental overhead rates: Molding Fabrication Total Machine-hours 23,000 31,000 54,000 Fixed manufacturing overhead cost $ 760,000 $ 240,000 $ 1,000,000 Variable manufacturing overhead cost per machine-hour $ 4.00 $ 1.00 During the year, the…
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Eli Lilly Corporation has their headquarters in Indiana. Lilly uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Lilly has provided the following estimated costs for next year: Direct Materials Direct Labor Rent on Factory Building Sales Salaries Depreciation on Factory Equipment Indirect Labor Production Supervisor's Salary Lilly estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be: Multiple Choice O O $4.18 $2.88 $1.95 $7,000 $21,000 $16,000 $26,000 $9,500 $13,500 $18,500 $2.40
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The chief cost accountant for Voltaire Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning May 1 would be $2,340,000 and total direct labor costs would be $1,800,000. During May, the actual direct labor cost totaled $145,000 and factory overhead cost incurred totaled $192,100. Question Content Area a. What is the predetermined factory overhead rate based on direct labor cost? Enter your answer as a whole percent not in decimals. fill in the blank 1772e2fb3039fb1_1 % Question Content Area b. Journalize the entry to apply factory overhead to production for May. If an amount box does not require an entry, leave it blank. blank - Select - - Select - - Select - - Select - Question Content Area c. What is the May 31 balance of the account Factory Overhead—Blending Department? Amount: $fill in the blank 1ea1070e903a021_1 Debit or Credit? d. Does the balance in part (c) represent overapplied or underapplied factory…
Hyu Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor-hours for the upcoming year at 56,000 labor-hours. The estimated variable manufacturing overhead was $3.18 per labor-hour and the estimated total fixed manufacturing overhead was $1,237,160. The actual labor-hours for the year turned out to be 56,600 labor-hours. The predetermined overhead rate for the recently completed year was closest to: Multiple Choice $22.49. $3.18. $25.01. $25.27.
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