I need help with this problem and accounting question Meridian Design Studio applies overhead to client projects based on directdesigner hours. Overhead was estimated to be $384,000, direct designer hourswere estimated to be 12,800, and direct designer cost was projected to be$512,000. During the year, Meridian incurred actual overhead costs of$390,500, actual direct designer hours of 13,200, and actual direct designercosts of $528,000.By year-end, the firm's overhead was

Step 1: Definition of OverheadOverhead refers to the indirect costs of producing goods or services…

Answered: Meridian Design Studio applies overhead…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 7EB: A company estimates its manufacturing overhead will be $840,000 for the next year. What is the...

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A company estimates its manufacturing overhead will be $840,000 for the next year. What is the predetermined overhead rate given each of the following Independent allocation bases? Budgeted direct labor hours: 90,615 Budgeted direct labor expense: $750000 Estimated machine hours: 150,000
Rockford Company has four departmental accounts: Building Maintenance, General Factory Overhead, Machining, and Assembly. The direct labor hour method is used to apply factory overhead to the jobs being worked on in Machining and Assembly. The company expects each production department to use 30,000 direct labor hours during the year. The estimated overhead rates for the year include the following: During the year, both Machining and Assembly used 28,000 direct labor hours. Factory overhead costs incurred during the year follow: In determining application rates at the beginning of the year, cost allocations were made as follows, using the sequential distribution method: Building Maintenance to: General Factory Overhead, 10%; Machining, 50%; Assembly, 40%. General factory overhead was distributed according to direct labor hours. Required: Determine the under- or overapplied overhead for each production department. (Hint: First you must distribute the service department costs.)
Douglas Davis, controller for Marston, Inc., prepared the following budget for manufacturing costs at two different levels of activity for 20X1: During 20X1, Marston worked a total of 80,000 direct labor hours, used 250,000 machine hours, made 32,000 moves, and performed 120 batch inspections. The following actual costs were incurred: Marston applies overhead using rates based on direct labor hours, machine hours, number of moves, and number of batches. The second level of activity (the right column in the preceding table) is the practical level of activity (the available activity for resources acquired in advance of usage) and is used to compute predetermined overhead pool rates. Required: 1. Prepare a performance report for Marstons manufacturing costs in the current year. 2. Assume that one of the products produced by Marston is budgeted to use 10,000 direct labor hours, 15,000 machine hours, and 500 moves and will be produced in five batches. A total of 10,000 units will be produced during the year. Calculate the budgeted unit manufacturing cost. 3. One of Marstons managers said the following: Budgeting at the activity level makes a lot of sense. It really helps us manage costs better. But the previous budget really needs to provide more detailed information. For example, I know that the moving materials activity involves the use of forklifts and operators, and this information is lost when only the total cost of the activity for various levels of output is reported. We have four forklifts, each capable of providing 10,000 moves per year. We lease these forklifts for five years, at 10,000 per year. Furthermore, for our two shifts, we need up to eight operators if we run all four forklifts. Each operator is paid a salary of 30,000 per year. Also, I know that fuel costs about 0.25 per move. Assuming that these are the only three items, expand the detail of the flexible budget for moving materials to reveal the cost of these three resource items for 20,000 moves and 40,000 moves, respectively. Based on these comments, explain how this additional information can help Marston better manage its costs. (Especially consider how activity-based budgeting may provide useful information for non-value-added activities.)
Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing cost information for the next year: If Adam uses the step-down (sequential) method, beginning with the Maintenance Department, to allocate support department costs to production departments, the total overhead (rounded to the nearest dollar) for the Machining Department to allocate to its products would be: a. 407,500. b. 422,750. c. 442,053. d. 445,000.
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?
Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs: If the labor rate is $25 per hour, what is the per-unit cost of each product?
Minor Co. has a job order cost system and applies overhead based on departmental rates. Service Department 1 has total budgeted costs of 168,000 for next year. Service Department 2 has total budgeted costs of 280,000 for next year. Minor allocates service department costs solely to the producing departments. Service Department 1 cost is allocated to producing departments on the basis of machine hours. Service Department 2 cost is allocated to producing departments on the basis of direct labor hours. Producing Department 1 has budgeted 8,000 machine hours and 12,000 direct labor hours. Producing Department 2 has budgeted 2,000 machine hours and 12,000 direct labor hours. What is the total cost allocation from the two service departments to Producing Department 1? a. 173,600 b. 140,000 c. 134,400 d. 274,400
If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of capacity the next month, will a different cost per unit be charged to the work-in-process account each month for factory overhead assuming that a predetermined annual overhead rate is used?
Riverview Company's budget for the coming year includes $8,600,000 for manufacturing overhead, 50,000 hours of direct labor, and 630,000 hours of machine time. If Riverview applies overhead using a predetermined rate based on machine-hours, what amount of overhead will be assigned to a unit of output which requires 0.8 machine hours and 0.30 labor hours to complete?
Tech Solutions computes its predetermined overhead rate annually based on direct labor - hours. At the beginning of the year, it estimated 50,000 direct labor - hours would be required for the period's estimated level of client service. The company also estimated $ 225,000 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor - hour. The firm's actual overhead cost for the year was $238, 100 and its actual total direct labor was 53, 100 hours. Required: 1. Compute the predetermined overhead rate. 2. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available for this job: Direct materials $ 44, 850 Direct labor cost $ 28, 200 Direct labor - hours worked 200 Compute the total job cost for Xavier Company.
Tech Solutions computes its predetermined overhead rate annually based on direct labor-hours. At the beginning of the year, it estimated 80,000 direct labor-hours would be required for the period's estimated level of client service. The' company also estimated $680,000 of fixed overhead cost for the coming period and variable overhead of $0.50 per direct labor-hour. The firm's actual overhead cost for the year was $692,000 and its actual total direct labor was 83,000 hours. Required: 1. Compute the predetermined overhead rate. 2. During the year, Tech Solutions started and completed the Xavier Company engagement. The following information was available for this job: Direct materials Direct labor cost Direct labor-hours worked Compute the total job cost for Xavier Company. Complete this question by entering your answers in the tabs below. Required 1 Required 2 $ 38,000 $ 21,000 280 Compute the predetermined overhead rate. Note: Round your answer to 2 decimal places. Predetermined…
Smith Manufacturing estimates that its employees will utilize150,000 machine hours during the coming year. Total overhead costs are estimated to be $6,000,000, and direct labor hours are estimated to be 90,000.Actual machine hours are 110,000, and actual labor hours are 70,000. If Smith Manufacturing allocates overhead based on machine hours, what is the predetermined manufacturing overhead rate?

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