OBJEC Exercise 4.14 Departmental Overhead Rates Mariposa, Inc., produces machine tools and currently uses a plantwide overhead rate, based on machine hours. Harry Whipple, the plant manager, has heard that departmental overhead rates. can offer significantly better cost assignments than can a plantwide rate. Mariposa has the following data for its two departments for the coming year: Department A Department B Overhead costs (expected) Normal activity (machine hours) $720,000 120,000 $180,000 60,000 Required: 1. Compute a predetermined overhead rate for the plant as a whole based on machine hours. 2. Compute predetermined overhead rates for each department using machine hours.

OBJEC Exercise 4.14 Departmental Overhead Rates Mariposa, Inc., produces machine tools and currently uses a plantwide overhead rate, based on machine hours. Harry Whipple, the plant manager, has heard that departmental overhead rates. can offer significantly better cost assignments than can a plantwide rate. Mariposa has the following data for its two departments for the coming year: Department A Department B Overhead costs (expected) Normal activity (machine hours) $720,000 120,000 $180,000 60,000 Required: 1. Compute a predetermined overhead rate for the plant as a whole based on machine hours. 2. Compute predetermined overhead rates for each department using machine hours.

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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Single Plantwide Factory Overhead Rate Scrumptious Snacks Inc. manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The company has budgeted the following costs for the upcoming period: Factory depreciation $16,513 Indirect labor 40,924 Factory electricity 4,667 Indirect materials 9,692 Selling expenses 22,975 Administrative expenses 12,923 Total costs $107,694 Factory overhead is allocated to the three products on the basis of processing hours. The products had the following production budget and processing hours per case: Budgeted Volume(Cases) Processing HoursPer Case Tortilla chips 4,200 0.10 Potato chips 3,900 0.12 Pretzels 1,800 0.15 Total 9,900 If required, round all per-case answers to the nearest cent. a. Determine the single plantwide factory overhead rate.$fill in the blank 1 per processing hour b. Use the overhead rate in (a) to determine the…
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