Built-2-Last Corporation makes and sells custom furniture. The company has two divisions specializing in different types offurniture: the concrete division and the wood division. Information pertaining to each of these divisions is as follows:Material weightDirect labor hoursConcreteWood250,000 lbs 50,000 lbs2,500 hours 5,250 hoursThe company incurred $500,000 of overhead cost and is trying to determine the best cost driver for allocating these costsbetween the two departments.Requireda. Which cost driver is the manager of the wood department likely to recommend for the allocation of the overhead cost?b. What argument might the manager of the concrete department raise against using the cost driver recommended inRequirement a?Complete this question by entering your answers in the tabs below.Required A Required BWhich cost driver is the manager of the wood department likely to recommend for the allocation of the overhead cost?Cost driver

Cost drivers are directly related with the allocation of the overhead cost. Cost driver is an…

Answered: ight or hours Concrete 250,000 lbs…

ight or hours Concrete 250,000 lbs 2,500 hours incurred $500,000 of overhea vo departments. driver is the manager of the we

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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3 Kamili Company has the following three manufacturing overhead cost drivers. Cost Driver Design changes Machine setups Electricity usage Level of Activity $2,680 $3,080 $3,260 $1,550 $3,580 $2,860 100 changes per year 2,000 setups per year 12,000 kilowatt-hours per year Overhead Cost $ 5,000 18,000 36,000 Kamili Company started and completed work on 25 different jobs during the year. One of these jobs was Job #781. Job #781 required 16 design changes, 40 machine setups, and 700 kilowatt-hours of electricity. How much manufacturing overhead should be allocated to Job #781? Note: Kamili uses activity-based costing.
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5 es ! Required information [The following information applies to the questions displayed below.] The following selected information was extracted from the 20x1 accounting records of Lone Oak Products: Raw material purchases Direct labor Indirect labor Selling and administrative salaries Building depreciation* Other selling and administrative expenses Other factory costs Sales revenue ($130 per unit) *Seventy-five percent of the company's building was devoted to production activities; the remaining for selling and administrative functions. $ 175,000 254,000 109,000 133,000 January 1 $ 15,800 35,700 111,100 Net income 80,000 195,000 344,000 1,495,000 Inventory data: Raw material Work in process Finished goods* *The January 1 and December 31 finished-goods inventory consisted of 1,350 units and 1,190 units, respectively. December 31 $ 18,200 62,100 97,900 4. Determine net income for 20x1, assuming a 30% income tax rate. percent was used
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Tyra Toy Company incurred the following costs during 20x1: Direct Materials ₱ 5,000,000 Direct Labor 3,500,000 Manufacturing Overhead Utilities (primarily electricity) 250,000 Depreciation Plant and Equipment 350,000 Insurance 260,000 Supervisory Salary 470,000 Property Taxes 330,000 Selling Cost: Advertising 315,000 Sales Commission 145,000 Administrative Costs: Salaries of top management 580,000 Office Supplies 70,000 Depreciation on Building and Equipment 140,000 The company sold all of its products manufactured during the year. Depreciation is on a straight-line basis. During 20x1, the company operated at about half of its capacity, due to a slowdown in the economy. Prospects for 20x2 are slightly better. The marketing manager, forecasts a 30 percent growth in sales over the 20x1 level.…
K | Jamie, the owner of 'Jamie's Port a Potty' leases 10 used portable bathrooms from Royal Restrooms. The company sets up and services portable bathrooms for long term construction projects. The following costs were recorded for last month for Jamie: $1,500 rent costs $200 emergency waste calls (2 calls last month) to construction sites $4,000 salaries for management $500 insurance $300 supplies (toilet paper, etc.,) $2,000 employee hourly wages What were Jamie's variable costs last month? O A. $2,500 B. $6,300 C. $6,000 O D. $3,000 O E. $5,500 06 پر
Cost of Services Sold Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Direct materials Direct labor Variable overhead Fixed overhead ? $472,500 15,000 18,000 Next year, HHH expects to purchase $25,600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: Direct Materials Inventory Required: Beginning $4,000 2,600 Ending There is no work-in-process inventory and no finished goods inventory; in other words, a cleaning is started and completed on the same day. 1. Prepare a statement of cost of services sold in good form. If an amount is zero, enter "0". Happy Home Helpers, Inc. Statement of Cost of Services Sold For the Coming Year 2. How does this cost of services sold…
Loring Company incurred the following costs last year: Direct materials$216,000Sales salaries$65,000Factory rent24,000Advertising37,000Direct labor120,000Depreciation on the headquarters building10,000Factory utilities6,300Salary of the corporate receptionist30,000Supervision in the factory50,000Other administrative costs175,000Indirect labor in the factory30,000Salary of the factory receptionist28,000Depreciation on factory equipment9,000Sales commissions27,000 Required: Classify each of the costs using the following table format. Be sure to total the amounts in each column. Example: Direct materials, $216,000. Product CostPeriod CostCostsDirect MaterialsDirect LaborManufacturing OverheadSelling ExpenseAdministrative ExpenseDirect materials$216,000 What was the total product cost for last year? What was the total period cost for last year? If 30,000 units were produced last year, what was the unit product cost?
The Baker Company manufactures a product in a single process. The following information is available: Input material Material added 5,000 kilos valued at s18,000 $4,000 $14,000 $20,500 10% of input 5.00 per unit Direct labour cost incurred Manufacturing overhead incurred Normal losses Scrap value of losses Units completed and transferred out 4.300 units iv) Vwhat is the manufacturer's true loss?
Guna publishing company has three service departments & two operating departments. Selected data from a recent period on the five departments follow. Service Departments Operating Departments Total A B C 1 2 Overhead costs 140,000 105,000 48,000 275,000 430,000 998,000 Number of employees 60 35 140 315 210 760 Space occupied 15,000 10,000 20,000 40,000 100,000 185,000 Hours of press time - - - 30,000 60,000 90,000 The company allocated service department costs by the step method in the following order. A(number of employees). (B/space occupied), & C( hours of press time ) . The company makes no distinction between variable & fixed service department costs. Required Assuming that the company used the direct method, how much overhead cost would be allocated to each operating department? using the step method, allocate the service department costs to the…
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