Ivanhoe, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instrumentsand 200 pressure gauges were produced, and overhead costs of $87,970 were estimated. An analysis of estimated overhead costsreveals the following activities.ActivitiesCost DriversTotal Cost1.Materials handlingNumber of requisitions$37,8002.Machine setupsNumber of setups28,3203.Quality inspectionsNumber of inspections21.850$87,970The cost driver volume for each product was as follows.Cost DriversInstrumentsGaugesTotalNumber of requisitions4056451.050Number of setups190290480Number of inspections230245475

Step 1: blank data provided in this table step 2: Overhead rate Material handling$ 36 per…

Answered: Ivanhoe, Inc. manufactures two…

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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Honeywell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year. Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection $0.22 Cost Driver Orders Setups Machine hours $1.34 $1.86 $0.47 Parts Inspections Estimated Overhead $21,500 $31,100 $46,500 $51,600 $35,400 Cost Driver Activity. 500 orders 450 setups 125,000 hours 1,000,000 parts Overhead is applied using traditional costing based on direct labor hours. What is the overhead application rate? 500 inspections 45
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February: Fixed Component per Month Variable Component Revenue per Job $ 278 Actual Total for February $ 33,390 Technician wages $ 8,600 $ 8,450 Mobile lab operating expenses $ 5,000 $ 33 $ 9,130 Office expenses $ 2,700 $ 2 $ 2,810 Advertising expenses $ 1,570 $ 1,640 Insurance $ 2,860 Miscellaneous expenses $ 930 $ 1 $ 2,860 $ 365 The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $5,000 plus $33 per job, and the actual mobile lab operating expenses for February were $9,130. The company expected to work 130 jobs in February, but actually worked 136 jobs. Required: Prepare a flexible budget performance report showing AirQual Test Corporation's revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting…
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Johnston Company cleans and applies powder coat paint to metal items on a job-order basis. Johnston has budgeted the following amounts for various overhead categories in the coming year. Supplies $220,000 Gas 56,000 Indirect labor 172,000 Supervision 75,500 Depreciation on equipment 51,000 Depreciation on the buliding 45,000 Rental of special equipment 11,500 Electricity (for lighting, heating, and air conditioning) 28,300 Telephone 5,000 Landscaping service 1,800 Other overhead 50,000 In the coming year, Johnston expects to powder coat 140,000 units. Each unit takes 1.4 direct labor hours. Johnston has found that supplies and gas (used to run the drying ovens—all units pass through the drying ovens after powder coat paint is applied) tend to vary with the number of units produced. All other overhead categories are considered to be fixed. Required: Question Content Area 1. Calculate the number of direct labor hours Johnston must budget for the coming…
Huron Company produces a cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours 6.00 pounds 0.50 hours During the most recent month, the following activity was recorded: a. 11,000.00 pounds of material were purchased at a cost of $2.10 per pound b. All of the material purchased was used to produce 1,500 units of Zoom. c. 500 hours of direct labor time were recorded at a total labor cost of $6,500. Required: Direct materials Direct labor 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 2. Labor efficiency variance Standard Price or Rate Standard Cost $ 2.30 per pound $10.00 per hour Note: For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,…
Everlast Co. manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $432,000 payroll for 4,800 direct labor-hours. Listed below is cost driver information used in the product-costing system: Overhead Cost Pool Budgeted Overhead Cost Driver Estimated Cost Driver Level Machine setups $ 120,000 # of setups 120 setups Materials handling 104,400 # of barrels 8,700 barrels Quality control 264,000 # of inspections 1,100 inspections Other overhead cost 144,000 # of machine hours 12,000 machine hours Total overhead $ 632,400 A current product order has the following requirements: Machine setups 8 setups Materials handling 606 barrels Quality inspections 80 inspections Machine hours 830 machine hours Direct labor hour 336 hours What is the total manufacturing overhead for the current product order if the firm uses a plantwide rate based on direct…
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Chenango Industries uses 12 units of part JR63 each month in the production of radar equipment. The cost of manufacturing one unit of JR63 is the following: 5 4,000 Direct naterial Material handling (20x of direct-naterial cost) Direct labor Manufarturing overhead (150% of direct labor) 39,000 S8,500 Total manufacturing cost $102, 300 Material handling represents the direct variable costs of the Recelving Department that are applied to direct materials and purchased components on the basis of their cost. This is a separate charge in addition to manufacturing overhead. Chenango Industries' annual manufacturing overhead budget is one-third variable and two thirds fixed. Scott Supply, one of Chenango Industries' reliable vendors. has offered to supply part number JR63 at a unit price of $64,000.
M Huron Company produces a cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours 6.00 pounds 0.50 hours During the most recent month, the following activity was recorded: a. 22,900.00 pounds of material were purchased at a cost of $2.70 per pound. b. All of the material purchased was used to produce 3.000 units of Zoom c1,400 hours of direct labor time were recorded at a total labor cost of $18.200 Required: 1. Compute the materials price and quantity variances for the month, 2. Compute the labor rate and efficiency variances for the month. Note: For all requirements, Indicate the effect of ench variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round your intermediate calculations to the nearest whole dollar. Direct materials Direct labor 1. Materials price vanance 1. Materials quantity variance 2.…
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Direct materials Direct labor Standard Quantity or Hours 4.6 pounds 0.2 hours Rate $ 2.50 per pound $18.00 per hour During the most recent month, the following activity was recorded: a. Twenty thousand pounds of material were purchased at a cost of $2.35 per pound. b. The company produced only 3,000 units, using 14,750 pounds of material. (The rest of the material purchased remained in raw materials inventory.) c. 750 hours of direct labor time were recorded at a total labor cost of $14,925. Standard Price or Materials price variance Materials quantity variance Required: Compute the materials price and quantity variances for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Answer is complete but…
Vaughn Company manufactures two products, Mini A and Maxi B. Vaughn's overhead costs consist of setting up machines- $890,000; machining- $2,030,000; and inspecting- $640,000. Information on the two products is: Mini A Мaxi В Direct labour hours 14,000 26,000 Machine setups 700 500 Machine hours 21,000 23,000 Inspections 700 600 Overhead applied to Maxi B using traditional costing and direct labour hours is
Star Wars Corporation has identified the following overhead activities, costs, and activity drivers for the coming year. Activity Setup Inspecting Grinding Excepted Cost $180,000 $90,000 $630,000 Direct Material Direct Labor Units Completed Activity Driver Number setups Inspection hours Machine hours Number of setups Inspection hours Machine hours The company produces two different types of Starfighter aircrafts to be used by the Galactic Republic. Information regarding the production of each type is as follows: Aircraft A Activity Capacity $850,000 $200,000 1,000 35 2,000 13,000 75 6,000 18,000 Aircraft B $950,000 $200,000 500 40 4,000 5,000 The company's normal activity is estimated at 6,000 direct labor hours. Each batch uses approximately 3,000 hours of direct labor. 1,000 units of A uses 3,000 D/L hrs and 500 units of B uses 3,000 of D/L hrs. a) Determine the unit cost for each product using direct labor hours to apply overhead. b) Determine total overhead cost (for Aircrafts A &…

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