Hall, Incorporated manufactures two components, Standard and Ultra, that are designed for the same function, but are made of different metals for operational performance reasons. The metal used in Standard is easy to work with and there are few quality issues or reworking required on the machines. The metal used in Ultra is more difficult to work with and often needs additional machine time and rework. Data on expected operations and direct costs for the next fiscal year follow Standard Units produced Direct labor-hours used Machine hours used Direct materials costs Direct labor costs Account Administration Engineering Machine operation and maintenance 48,000 144,000 24,000 Miscellaneous Supervision Total $ 3,384,000 2,520,000 Ultra 16,500 22,500 22,500 Total 64,500 166,500 46,500 $5,163,000 855,000 The planning process team at Hall, Incorporated has estimated the following manufacturing overhead costs for the next fiscal year: Amount $ 825,400 5,699,500 875,000 540,100 884,500 $8,824,500 $ 8,547,000 3,375,000 The cost accounting system at Hall, Incorporated calculates product costs by adding allocated overhead to the direct costs of the product. Overhead costs are allocated based on direct labor-hours. Required: a. Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system.
Hall, Incorporated manufactures two components, Standard and Ultra, that are designed for the same function, but are made of different metals for operational performance reasons. The metal used in Standard is easy to work with and there are few quality issues or reworking required on the machines. The metal used in Ultra is more difficult to work with and often needs additional machine time and rework. Data on expected operations and direct costs for the next fiscal year follow Standard Units produced Direct labor-hours used Machine hours used Direct materials costs Direct labor costs Account Administration Engineering Machine operation and maintenance 48,000 144,000 24,000 Miscellaneous Supervision Total $ 3,384,000 2,520,000 Ultra 16,500 22,500 22,500 Total 64,500 166,500 46,500 $5,163,000 855,000 The planning process team at Hall, Incorporated has estimated the following manufacturing overhead costs for the next fiscal year: Amount $ 825,400 5,699,500 875,000 540,100 884,500 $8,824,500 $ 8,547,000 3,375,000 The cost accounting system at Hall, Incorporated calculates product costs by adding allocated overhead to the direct costs of the product. Overhead costs are allocated based on direct labor-hours. Required: a. Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Hall, Incorporated manufactures two components, Standard and Ultra, that are designed for the same function, but are made of
different metals for operational performance reasons. The metal used in Standard is easy to work with and there are few quality issues
or reworking required on the machines. The metal used in Ultra is more difficult to work with and often needs additional machine time
and rework.
Data on expected operations and direct costs for the next fiscal year follow:
Account
Administration
Engineering
Machine operation and maintenance
Standard
Miscellaneous
Supervision
Total
48,000
144,000
24,000
Ultral
$ 3,384,000
2,520,000
Units produced
Direct labor-hours used
Machine-hours used
Direct materials costs
$5,163,000
Direct labor costs
855,000
The planning process team at Hall, Incorporated has estimated the following manufacturing overhead costs for the next fiscal year:
16,500
22,500
22,500
Total
Amount
$ 825,400
5,699,500
875,000
540,100
884,500
$8,824,500.
64,500
166,500
46,500
$8,547,000
3,375,000
The cost accounting system at Hall, Incorporated calculates product costs by adding allocated overhead to the direct costs of the
product. Overhead costs are allocated based on direct labor-hours.
Required:
a. Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system.
stom would improve the estimated product costs. The analyst
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