Milan Manufacturing Company has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:Cost PoolSupervision of direct laborMachine maintenanceFacility rentTotal overhead costsCost driverActivity level920,000Overhead Costs$794,000Direct labor-hours$140,000Machine-hours1,040,000$216,000$1,150,000Square feet of area130,000The accounting records show the Mossman Job consumed the following resources:Cost driverActual levelDirect labor-hours230Machine-hours1,547Square feet of area50OA. $0.86 per direct labor-hourOB. $0.80 per direct labor-hourOC. $1.16 per direct labor-hourOD. $1.25 per direct labor - hour

The objective of the question is to calculate the overhead cost per direct labor-hour for the Milan…

Answered: Milan Manufacturing Company has…

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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Solomons, Inc. has refined its allocation system by separating manufacturing overhead into two cost pools, one for each department. The estimated cost for the mixing department, $615,000, will be allocated based on direct labor hours, and the estimated direct labor hours for the year are 201,000. The estimated cost for the packaging department, $293,000, will be allocated based on direct labor hours, and the estimated machine hours for the year are 59,200. In October, the company incurred 17,240 direct labor hours in the mixing department and a total of 14,260 machine hours in the packaging department.(Round your answers to two decimal places when needed and use rounded answers for all future calculations).1. Compute the predetermined overhead allocation rates. Department Total estimated overhead cost ? Total estimated quantity of the overhead allocation base = Predetermined Overhead Allocation Rate (Per Machine Hour) Mixing Department = Packaging Department =…
Mason Company has two manufacturing departments—Machining and Assembly. The company considers all of its manufacturing overhead costs to be fixed costs. It provided the following estimates at the beginning of the year as well as the following information with respect to Jobs A and B: Estimated Data Machining Assembly Total Manufacturing overhead $ 20,184,000 $ 841,000 $ 21,025,000 Direct labor hours 29,000 696,000 725,000 Machine hours 696,000 24,000 720,000 Job A Machining Assembly Total Direct labor hours 5 10 15 Machine hours 11 2 13 Job B Machining Assembly Total Direct labor hours 4 5 9 Machine hours 12 3 15 Required: 1. If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how much manufacturing overhead cost would be applied to Job A? Job B? (Round your answers to the nearest whole dollar amount.) 2. Assume that Mason Company uses departmental…
Saktanmokobaybeh Company uses standard costing for direct materials and direct labor. The following monthly cost functions were developed for manufacturing overhead items: Budgeted Overhead Item Cost Function: Indirect materials 1.00 per DLH Indirect labor 1.25 per DLH Utilities 0.50 per DLH Insurance 50,000 Depreciation 400,000 The cost functions were determined using observations from 20,000 to 30,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month. The theoretical capacity per month of the company is 30,000 units. Each unit requires 2 direct labor hours. The Company applies overhead using direct labor hours. Actual data for this month are as follows: Variable overhead costs P 87,000 Fixed overhead costs 423,000 Direct labor hours 26,000 Question 1: The entry pertaining to the volume variance if the standard direct labor hours allowed for this month was 24,000 will include a debit/(credit) to manufacturing overehead amounting to? (USE…
Determine the applied factory overhead rate of department using direct labor hours of 562,000 as the basis.
Trying to find the activity based costing of the following for the allocated overhead
Sinbad Company applies factory overhead of the basis of direct labor hours. Budget and actual data for direct labor and overhead for the year are as follows: Budget Actual Direct labor hours 1,200,000 1,300,000 Manufacturing overhead costs 1,440,000 1,520,000 The manufacturing overhead for Sinbad for the current year is
Saktanmokobaybeh Company uses standard costing for direct materials and direct labor. The following monthly cost functions were developed for manufacturing overhead items: Budgeted Overhead Item Cost Function: Indirect materials P 1.00 per DLH Indirect labor 1.25 per DLH Utilities 0.50 per DLH Insurance 50,000 Depreciation 400,000 The cost functions were determined using observations from 20,000 to 30,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month. The theoretical capacity per month of the company is 30,000 units. Each unit requires 2 direct labor hours. The Company applies overhead using direct labor hours. Actual data for this month are as follows: Variable overhead costs P 87,000 Fixed overhead costs 423,000 Direct labor hours 26,000 P
Kelso Manufacturing allocates manufacturing overhead using a single predetermined rate based on a planned use of 15,000 direct labour hours per year. Company leadership recently learned that its costing system may be too simple for its operations, and that job cost fairly inaccurate. A consultant was hired to study overhead costs, and the following information reflects the cost pools and activity rates that were determined: Cost Pool Total Cost Activity Rate Purchasing $90,000 $30/purchase order Assembly $150,000 $?/direct labour hour Inspection $60,000 $15/inspection Production $150,000 $3/unit produced $450,000 Total Based on the information presented in the introduction and table above, Kelso's single predetermined manufacturing overhead cost rate is __________ and its rate for the Assembly cost pool is __________ Question 8 a. $30/direct labour hour; $30/direct labour hour b. $30/direct labour hour; $10/direct labour hour C. $30/direct labour hour; $15/direct labour hour d.…
J5
Unigloo Corporation uses a predetermined overhead rate based on direct labour-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year:Direct materials $5,000Direct labour $19,000Rent on factory building $16,000Sales salaries $24,000Depreciation of corporate office printers $13,000Depreciation on factory machinery $7,000Indirect materials $11,000Indirect labour $14,000Unigloo estimates that 12,000 direct labour-hours will be worked during the year. Calculate the predetermined overhead rate per hour.
Attire, Inc., is a jeans manufacturing company. Attire uses a plantwide rate based on direct labor hours to assign its overhead costs. The company has the following estimated and actual data for the coming year: Estimated overhead $1,000,000 Expected activity 250,000 Actual activity (direct labor hours) 265,000 Units produced 500,000 Attire applies overhead cost to each unit by using predetermined plantwide overhead rate based on direct labor hours. Calculate the overhead cost per unit of jeans produced by Attire. a.$4.24 b.$2.65 c.$4.00 d.$2.12
A company manufactures a product with three models, each with different direct material costs and labour hour required and monthly production volume as follows: Labor rate is $10 per hour. The total manufacturing overhead is estimated to be $103,000 per month. Required: a) The manufacturing overhead is allocated to the three models based on labor hour. Compute the pre-determined overhead rate and the unit product cost of Model A. b) The company is considering to use the activity-based costing and gathers the following data related to the cost and activities: Model A Model B Model C Units of production 1,700 1,200 1,100 Labour hour required 0.3 0.6 0.7 Direct material costs 30 40 50 Expected Activity Activity Cost Pool Overhead Costs Model A Model B Model C Activity 1 $30,000 1,000 600 400…

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