Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hc (MH) and direct labor hours (DLH). Overhead cost Direct labor hours Machine hours Fabricating $ 560,000 Desk lamp Assembly $ 60,000 10,000 DLH 63,500 MH 52,800 DLH 70,000 MH Laval reports the following for one of its products, a desk lamp Fabricating Department Assembly Department Number of Direct Labor Hours per Machine Hours per Direct Labor Hours per Machine Hours per Unit Units Unit 3,000 5 DLH per unit 1 DLH per unit Unit 2 MH per unit Unit 8.5MH per unit Required: 1. Determine the plantwide overhead rate using 62,000 direct labor hours as the allocation base. 2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate. 3. Compute departmental overhead rates based on machine hours in the Fabricating department and direct labor hours in the Assembly department. 4. Determine the overhead cost per unit for the desk lamo using the departmental overhead rates.

Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hc (MH) and direct labor hours (DLH). Overhead cost Direct labor hours Machine hours Fabricating $ 560,000 Desk lamp Assembly $ 60,000 10,000 DLH 63,500 MH 52,800 DLH 70,000 MH Laval reports the following for one of its products, a desk lamp Fabricating Department Assembly Department Number of Direct Labor Hours per Machine Hours per Direct Labor Hours per Machine Hours per Unit Units Unit 3,000 5 DLH per unit 1 DLH per unit Unit 2 MH per unit Unit 8.5MH per unit Required: 1. Determine the plantwide overhead rate using 62,000 direct labor hours as the allocation base. 2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate. 3. Compute departmental overhead rates based on machine hours in the Fabricating department and direct labor hours in the Assembly department. 4. Determine the overhead cost per unit for the desk lamo using the departmental overhead rates.

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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Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments: Fabrication and Assembly. The factory overhead budget for the Fabrication Department is $928,620, using 469,000 direct labor hours. The factory overhead budget for the Assembly Department is $615,451, using 69,700 direct labor hours. If a desk lamp requires 5 hours of fabrication and 8 hours of assembly, the amount of factory overhead that Kaumajet Factory will allocate to each unit of desk lamp using the multiple production department factory overhead rate method with an allocation base of direct labor hours is a.$8.83 b.$22.15 c.$287.97 d.$80.54
D
The Kaumajet Factory produces two products - table lamps and desk lamps. It has two separate departments - Finishing and Production. The overhead budget for the Finishing Department is $550,000, using 500,000 direct labor hours. The overhead budget for the Production Department is $400,000 using 80,000 direct labor hours.If the budget estimates that a desk lamp will require 1 hours of finishing and 2 hours of production, what is the total amount of factory overhead the Kaumajet Factory will allocate to desk lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours, if 26,000 units are produced? a.$288,600 b.$475,000 c.$540,000 d.$187,200
IKAR, a small home furniture factory, operates with THREE production departments: Assembly, Polishing, and Packing and TWO service departments: Stores and Maintenance. For the forthcoming period, the total budgeted overhead costs are as follows: Allocated costs: Departments Indirect materials (RM) Indirect labor (RM) Assembly Polishing Packing Stores 3,800 4,630 2,120 900 9,900 8,180 6,200 4,760 5,800 Maintenance 120 The following factory overheads were obtained from the accounts relating to the period: RM 20,180 36,000 56,000 29,000 5,830 7,600 15,000 21,000 Heating and lighting Rent and rate Production supervision Plant depreciation Lubricant Office depreciation Direct labour Direct materials The following information is also available: Department Assembly Polishing Packing Stores Maintenance Number of Employees Floor Area (sq. metr.) 20 12 1150 1800 1250 1350 350 Machine hours 1200 2140 60 Direct labour hours 120 30 50 Plant's values (*000RM) 210 190 50 13 17 Required: Prepare an…
Blackwelder Factory produces two similar products: small table lamps and desk lamps. The total factory overhead budget is $615,000 with 478,000 estimated direct labor hours. It is further estimated that small table lamp production will require 261,000 direct labor hours, and desk lamp production will need 125,000 direct labor hours. Using a single plantwide factory overhead rate with an allocation base of direct labor hours, the factory overhead that Blackwelder Factory will allocate to small table lamp production if actual direct labor hours for the period for small table lamp production is 183,000 would be a.$518,641 b.$877,131 c.$236,070 d.$739,700
Haresh
Pita Bread Ltd has two production departments, Assembly and Finishing, and two service departments, Stores and Maintenance. The company has budgeted the following costs for the forthcoming period. Assembly Finishing Stores Maintain Allocation Indirect Material 15,250 13,500 12,650 14,000 Allocation Indirect Labour 10,250 5,600 5,520 7,500 Overheads Depreciation of equipment 58,000 Plant insurance 88,000 Heat and light 75,000 Canteen costs 24,000 Rent 50,000 Supervision 80,000 The following information is also available: Assembly Finishing Stores Maintain Total Floor Area sm 10,000 10,000 2,500 2,500 Employees 40 20 10 10 Plant book value $100,000 $100,000 $40,000 $50,000 Depreciation per annum 30% 30% 20% 20% Machine Hours 60,000 40,000 - - Stores Requisition $200,000 $300,000…
The following information is provided for Crank It Up Corp., a manufacturer of stereo systems. Crank It Up Corp. manufactures two different stereo systems: Feel the Beat model and Hurt My Ears model. Activity Total Budgeted Cost Allocation Base Setup $50,100 Number of setups Machine maintenance $40,200 Number of machine hours Total $90,300 Information Feel the Beat Hurt My Ears Total Units Direct labor hours 1,710 2,200 3,910 Number of setups 260 200 460 Number of machine hours 1,690 1,080 2,770 Crank It Up Corp. plans to produce 520 Feel the Beat systems and for Hurt My Ear systems, 700.(Round your answers to two decimal places when needed and use rounded answers for all future calculations).1. Compute the ABC indirect manufacturing cost per unit for each product. Activity Total estimated overhead cost / Total estimated quantity of the overhead allocation base = Predetermined Overhead Allocation Rate Setup / = Machine maintenance /…
Garfield Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Budgeted Activity Activity Cost Activity Base Casting $99,820 Machine hours Assembly 58,900 Direct labor hours Inspecting 21,252 Number of inspections Setup 33,221 Number of setups Materials handling 34,830 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Machine hours 2,101 1,119 3,220 Direct labor hours 791 2,309 3,100 Number of inspections 724 288 1,012 Number of setups 175 64 239 Number of loads 544 230 774 Units produced 6,569 1,747 8,316
Eclipse Motor Company manufactures two types of specialty electric motors, a commercial motor and a residential motor, through two production departments, Assembly and Testing. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering using the multiple production department factory overhead rate method. The following factory overhead was budgeted for Eclipse: Assembly Department $280,000 Testing Department 800,000 Total $1,080,000 Direct machine hours were estimated as follows: Assembly Department 4,000 hours Testing Department 5,000 Total 9,000 hours In addition, the direct machine hours (dmh) used to produce a unit of each product in each department were determined from engineering records, as follows: Commercial Residential Assembly Department 2.0 dmh 3.0 dmh Testing Department 6.0 1.5 Total machine hours per unit 8.0 dmh 4.5 dmh…
The following information is provided for Crank It Up Corp., a manufacturer of stereo systems. Crank It Up Corp. manufactures two different stereo systems: Feel the Beat model and Hurt My Ears model. Activity Total Budgeted Cost Allocation Base Setup $51,100 Number of setups Machine maintenance $39,900 Number of machine hours Total $91,000 Information Feel the Beat Hurt My Ears Total Units Direct labor hours 1,830 2,400 4,230 Number of setups 290 210 500 Number of machine hours 1,840 1,240 3,080 Crank It Up Corp. plans to produce 470 Feel the Beat systems and for Hurt My Ear systems, 700.(Round your answers to two decimal places when needed and use rounded answers for all future calculations). 1. Compute the ABC indirect manufacturing cost per unit for each product. 2. Compute the expected indirect manufacturing cost of each product.