Houghton Company maintains warehouses that stock items carried by its e-retailer clients. When one of Houghton's clients receives an order from an online customer, the order is forwarded to Houghton. Houghton then pulls the item from the warehouse, packs it, and ships it to the customer. Houghton uses a predetermined variable overhead rate based on direct labor hours. According to the company's records, 0.04 direct labor hours are required to fulfill an order for one item and the variable overhead rate is $5.90 per direct labor hour. During July, Houghton shipped 180,000 orders using 6,800 direct labor hours. The company incurred a total of $39,440 in variable overhead costs. The variable overhead efficiency variance during July was

Houghton Company maintains warehouses that stock items carried by its e-retailer clients. When one of Houghton's clients receives an order from an online customer, the order is forwarded to Houghton. Houghton then pulls the item from the warehouse, packs it, and ships it to the customer. Houghton uses a predetermined variable overhead rate based on direct labor hours. According to the company's records, 0.04 direct labor hours are required to fulfill an order for one item and the variable overhead rate is $5.90 per direct labor hour. During July, Houghton shipped 180,000 orders using 6,800 direct labor hours. The company incurred a total of $39,440 in variable overhead costs. The variable overhead efficiency variance during July was

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 8E: Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the...

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Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the following activities and the relative time demanded by each activity: Required: Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity. For non-value-added activities, indicate why they are non-value-added.
Each employee for the Gedding Manufacturing Co., a firm using ajob-cost inventory costing method, must reconcile his or her total hours worked with thehours worked on individual jobs using a job time sheet at the time weekly payroll time cardsare prepared. The job time sheet is then stapled to the time card. Explain how you could testthe direct labor dollars included in inventory as a part of the payroll and personnel tests
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You are the Accountant for a Custom Furniture company. The company uses a job order costing systemand applies overhead on the basis of direct labor hours. The January 1, 2024 raw materials inventorybalance was $19,000. Actual overhead for January was $106,500 and Direct Labor Hours for Januarytotaled 2,975. The January 31, 2024 raw materials inventory balance was $27,000. During January2024, Jobs No. 21 & 22 were completed. A single Job, No. 22, was sold for $110,000 during January2024. January 31, 2024 costing information for jobs 20, 21, 22 and 23 are below.Job No. Direct Materials Direct Labor Direct Labor Hours20 7,500$ 18,600$ 1,20021 4,000$ 12,788$ 82522 7,000$ 13,563$ 87523 3,000$ 3,100$ 200The predetermined overhead rate for 2024 is based on the company’s estimated total manufacturingoverhead during all of 2024 which is $1,265,125 and the estimated total direct labor hours of 34,900.The owner of the company does not have an accounting background and doesn’t understand how…
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Elite Home Decor manufactures customized household furnishings. The company uses a perpetual inventory system and has a highly labor-intensive production process, so it assigns manufacturing overhead based on direct labor cost. Elite expects to incur $2,205,000 of manufacturing overhead costs and estimated direct labor costs of $3,150,000 during 2020. At the end of December 2019, Elite reported work in process inventory (Job 551) of $93,000 The following events occurred during January - March 2020. i) Purchased materials on account, $392,000 ii) Incurred manufacturing wages of $400,000 iii) Requisitioned direct materials and used direct labor in manufacturing Direct Materials Direct Labor Job 551 $70,200 $61,200 Job 552 97,500 115,600 Job 553 105,300 78,200 Job 554 117,000 85,000 v) Issued indirect materials to production, $30,000 v) Charged indirect manufacturing wages to production, $60,000 vi) Depreciation of production machinery,…
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