Johnson Supplies applies manufacturing overhead costs to products at a budgeted indirect-cost rate of$60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the Toy product. Estimates for this order include: Direct materials $40,000; 500 direct manufacturing labor-hours at $20 per hour; and a 20% markup rate on total manufacturing costs. Manufacturing overhead cost estimates for this special order total: a. $30,000 b. $36,000 c. $10,000 d.
Johnson Supplies applies manufacturing overhead costs to products at a budgeted indirect-cost rate of$60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the Toy product. Estimates for this order include: Direct materials $40,000; 500 direct manufacturing labor-hours at $20 per hour; and a 20% markup rate on total manufacturing costs. Manufacturing overhead cost estimates for this special order total: a. $30,000 b. $36,000 c. $10,000 d.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Johnson Supplies applies manufacturing overhead costs to products at a budgeted indirect-cost rate of$60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the Toy product. Estimates for this order include: Direct materials $40,000; 500 direct manufacturing labor-hours at $20 per hour; and a 20% markup rate on total manufacturing costs.
Manufacturing overhead cost estimates for this special order total:
Manufacturing overhead cost estimates for this special order total:
a.
$30,000
b.
$36,000
c.
$10,000
d.
None of these answers is correct.
Charles Seating Inc., manufactures car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.
Data for Department A for February 2017 are:
Work in process, beginning inventory, 30% converted.............. 200 units
Units started during February.................................... 800 units
Work in process, ending inventory................................ 240 units
Costs for Department A for February 2017 are:
Work in process, beginning inventory:
Direct materials.................................................. $150,000
Conversion costs.................................................. $210,000
Direct materials costs added during February...................... $603,000
Conversion costs added during February............................ $429,000
How many units were completed and transferred out of Department A during February?
Data for Department A for February 2017 are:
Work in process, beginning inventory, 30% converted.............. 200 units
Units started during February.................................... 800 units
Work in process, ending inventory................................ 240 units
Costs for Department A for February 2017 are:
Work in process, beginning inventory:
Direct materials.................................................. $150,000
Conversion costs.................................................. $210,000
Direct materials costs added during February...................... $603,000
Conversion costs added during February............................ $429,000
How many units were completed and transferred out of Department A during February?
a.
440 units
b.
800 units
c.
1000 units
d.
760 units
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