Indirect material, pounds per unit 0.15 Indirect material, cost per pound $2 Indirect labor hours 1 Indirect labor rate per hour $16.00 Variable maintenance per unit $0.70 Variable utilities per unit $0.10 Supervisor salaries $11,000 Maintenance salaries $8,000 Insurance $3,000 Depreciation $1,500 Prepare a manufacturing overhead budget if the number of units to produce for January, February, and March are 2,500, 3,000, and 2,600, respective

Indirect material, pounds per unit 0.15 Indirect material, cost per pound $2 Indirect labor hours 1 Indirect labor rate per hour $16.00 Variable maintenance per unit $0.70 Variable utilities per unit $0.10 Supervisor salaries $11,000 Maintenance salaries $8,000 Insurance $3,000 Depreciation $1,500 Prepare a manufacturing overhead budget if the number of units to produce for January, February, and March are 2,500, 3,000, and 2,600, respective

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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Aspen Technologies has the following budget data: Estimated direct labor hours 8,800 Estimated direct labor dollars $68,500 Estimated factory overhead costs $153,700 If factory overhead is to be applied based on direct labor hours, the predetermined overhead rate is a.$17.47 b.$20.96 c.$26.20 d.$13.97
Apex Corporation estimates that its production for the coming year will be 10,000 units with the following unit costs: Direct materials P40 Direct labor P60 Direct labor is paid at the rate of P24 per hour. The machine should be run for 20 minutes to produce one unit. Total estimated overhead is expected to consist of P400,000 for variable overhead and P400,000 for fixed overhead. What is the predetermined overhead rate based on direct labor cost? B D 113% 166% 133% 153%
Ikon Equipment produces exercise equipment. The following schedule reveals anticipated monthly production of bicycles for the first three months of the year: January 11,000 February 14,000 March 12,500 Ikon budgets for three direct labor hours per bicycle, at an average cost of $16.50 per hour. Variable factory overhead is applied at the rate of $10.25 per direct labor hour. Fixed overhead is expected to run $110,000 per month, which includes $10,000 per month of noncash expenses related to depreciation. Determine the total expected monthly cash outflow for labor and overhead
ECCO Equipment produces exercise equipment. The following schedule reveals anticipated monthly production of bicycles for the first three months of the year: January 10,000 February 14,500 March 12,000 ECCO budgets for three direct labor hours per bicycle, at an average cost of $18 per hour. Variable manufacturing overhead is applied at the rate of $10 per direct labor hour. Fixed overhead is expected to be $110,000 per month, which includes $15,000 per month of noncash expenses related to depreciation. Required: a) Prepare a direct labor budget for the first three months of the year. b) Prepare a manufacturing overhead budget, showing the monthly cash outflow for the first three months of the year. c) Would you refer to the budgets in (a) and (b) static or flexible budgets? Explain.
Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 12,000 hours for production: Variable overhead costs: Indirect factory labor $36,000 Power and light 9,120 Indirect materials 19,200 Total variable overhead cost $64,320 Fixed overhead costs: Supervisory salaries $50,160 Depreciation of plant and equipment 13,200 Insurance and property taxes 24,640 Total fixed overhead cost 88,000 Total factory overhead cost $152,320 Tannin has available 16,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 11,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Actual variable factory overhead costs: Indirect factory labor $32,180 Power and light 8,210 Indirect…
The November monthly factory overhead cost budget for Brass Ltd. at normal capacity of 10,000 units or 5,000 direct labor hours follows: Variable: Power $ 6,000 Supplies 12,000 Maintenance 15,000 Total variable factory overhead 33,000 Fixed: Supervisory salaries 24,000 Depreciation of buildings and equipment 8,000 Lights and heat 6,000 Property tax and insurance 22,000 Total fixed factory overhead 60,000 Total factory overhead $93,000 (1) Prepare a flexible budget for 80%, 100% and 120% of normal capacity.(2) Determine the rate for application of factory overhead to work in process at each level of volume in relation to both units and direct labor hours.
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The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year:
Discussion QuestionThe table below shows monthly data collected on production costs and on the number of unitsproduced over a twelve month period.Month Total ProductionCostsLevel of Activity(Units Produced)July $230,000 3,500August 250,000 3,750September 260,000 3,800October 220,000 3,400November 340,000 5,800December 330,000 5,500January 200,000 2,900February 210,000 3,300March 240,000 3,600April 380,000 5,900May 350,000 5,600June 290,000 5,000a) Determine the variable cost per unit and the fixed cost using the high-low method.b) What is the equation of the total mixed cost function?c) Based on the High-Low method, what is the total production costs if 6,500 units areproduced?d) Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale of 2cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the yaxis.e) Using the line of best-fit, determine the company’s fixed cost per month and the variablecost per unit. (Use 0 & 5,000…
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Rasmussen Corporation expects to incur indirect overhead costs of $80,000 per month and direct manufacturing costs of $12 per unit. The expected production activity for the first four months of the year are as follows. January February March April Estimated production in units 6,000 7,000 3,000 4,000 Required Calculate a predetermined overhead rate based on the number of units of product expected to be made during the first four months of the year. Allocate overhead costs to each month using the overhead rate computed in Requirement a. Calculate the total cost per unit for each month using the overhead allocated in Requirement b.