Ever Clean Company provides gutter cleaning services to residential clients. Overhead is allocated based on direct labor-hours (DLH). The owner, Joanne Clark, estimates that her gutter cleaners will work a total of 1,000 jobs during the year. Each job averages 600 feet of gutter surface and requires 12 direct labor-hours. Clark pays her gutter cleaners $15 per hour. The following table presents the budgeted overhead costs for 2018: Variable costs Supplies ($6.50 per DLH) Fixed costs (to support capacity of 12,000 DLH) Indirect labor Depreciation Other Total budgeted costs The budgeted overhead rate (USD/DLH) is closest to OA. 5.50 O B. 12.00 O C. 6.50 $ 78,000 25,000 17,000 24,000 $144,000

Ever Clean Company provides gutter cleaning services to residential clients. Overhead is allocated based on direct labor-hours (DLH). The owner, Joanne Clark, estimates that her gutter cleaners will work a total of 1,000 jobs during the year. Each job averages 600 feet of gutter surface and requires 12 direct labor-hours. Clark pays her gutter cleaners $15 per hour. The following table presents the budgeted overhead costs for 2018: Variable costs Supplies ($6.50 per DLH) Fixed costs (to support capacity of 12,000 DLH) Indirect labor Depreciation Other Total budgeted costs The budgeted overhead rate (USD/DLH) is closest to OA. 5.50 O B. 12.00 O C. 6.50 $ 78,000 25,000 17,000 24,000 $144,000

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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Craftmore Machining reports the following budgeted overhead cost and related data for this year. Activity Assembly Product design Budgeted Activity Usage 13,000 Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) Electricity 1,000 10,500 420 Setups Setup Total Budgeted Cost $ 409,500 63,000 21,000 52,500 $ 546,000 Required: 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 13,000 direct labor hours. 2. Job 31 used 220 direct labor hours and Job 42 used 500 direct labor hours. Allocate overhead cost to each job using the single plantwide overhead rate from part 1. 3. Compute an activity rate for each activity using activity-based costing. 4. Allocate overhead costs to Job 31 and Job 42 using activity-based costing. Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) Setups Activity Usage Job 31 220 28 52 4 Job 42 500 34 62 6 Complete this question by entering your…
J&J Co. provides house cleaning services. The company uses the number of jobs to measure activity. At the beginning of March, the company budgeted for 60 jobs, but the actual number of jobs turned out to be 70. Wages and salaries expense is a mixed cost. Supplies expense is a variable cost. Transportation expense is a fixed cost. Here is a report comparing the actual vs. budgeted revenues and costs for the month of March: What is the amount of Supplies Expense in the Flexible Budget?
Harrison, Inc. is preparing their budget for the upcoming year and requires a breakdown of the costs of power used in its factory into the fixed and variable components. They have determined the number of direct labor hours worked affects the cost of power. The following data on the cost of power used and direct labor hours worked are available for the last six months of this year: Month July August September October High-Low Method November December Total Cost of Power $ 14,850 15,400 16,370 19,800 17,600 18,500 $102.520 Direct Labor Hours 3,000 2,050 2,900 3,650 2,670 2,650 16.920 1. Assuming that Harrison uses the high-low method of analysis, calculate the cost function to be used to estimate the power costs. 2. They have determined that production needs will require 8,467 direct labor hours. Using the cost function calculated above, what is the estimated cost of power?
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Solomon Hats Corporation manufactures three different models of hats: Vogue, Beauty, and Glamour. Solomon expects to incur $640,000 of overhead cost during the next fiscal year. Other budget information follows. Vogue Beauty Glamour Total Direct labor hours 4,600 6,600 4,800 16,000 Machine hours 1,200 2,300 2,900 6,400 Use direct labor hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product. Use machine hours as the cost driver to compute the allocation rate and the budgeted overhead cost for each product.
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The total factory overhead for Big Light Company is budgeted for the year at $2,201,190. Big Light manufactures two different products: night lights and desk lamps. Night lights are budgeted for 18,000 units. Each night light requires 2 hours of direct labor. Desk lamps are budgeted for 18,700 units. Each desk lamp requires 3 hours of direct labor. a. Determine the total number of budgeted direct labor hours for the year.fill in the blank direct labor hours b. Determine the single plantwide factory overhead rate using direct labor hours as the allocation base. Round your answer to two decimal places.fill in the blank per direct labor hour c. Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate determined in (b). Round your answers to two decimal places.Night lights fill in the blank per unitDesk lamps fill in the blank per unit
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ABC Corporation has prepared the following overhead budget for next month. Activity level Variable overhead costs: Supplies Indirect labor Fixed overhead costs: Supervision Utilities Depreciation Total overhead cost 3,700 machine-hours $ 21,090 35,520 18,100 7,100 8,100 $ 89,910 The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 3,600 machine-hours rather than 3,700 machine-hours? (Round your intermediate calculations to 2 decimal places.)
The total factory overhead for Landen Company is budgeted for the year at $675,000. Landen manufactures two drapery products: sheer curtains and insulated curtains. These products each require 6 direct labor hours (dlh) to manufacture. Each product is budgeted for 7,500 units of production for the year. What would the factory overhead allocated per unit for insulated curtains using the single plantwide factory overhead rate be? a.$15.00 b.$270.00 c.$45.00 d.$90.00
S Craftmore Machining reports the following budgeted overhead cost and related data for this year. Budgeted Activity Usage Budgeted Cost $ 555,750 85,500 28,500 Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) 13,000 1,500 11,400 570 71,250 Setups $ 741,000 Activity Assembly Product design Electricity Setup Total Required: 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 13,000 direct labor hours. 2. Job 31 used 320 direct labor hours and Job 42 used 680 direct labor hours. Allocate overhead cost to each job using the single plantwide overhead rate from part 1. 3. Compute an activity rate for each activity using activity-based costing. 4. Allocate overhead costs to Job 31 and Job 42 using activity-based costing. Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) Setups Required 1 Required 2 Activity Usage Job 31 Required 3 320 43 56 6 Complete this question by…