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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View Policies Current Attempt in Progress Wilson Company manufactures a line of lightweight running shoes. CEO Charles Wilson estimated that the company would incur $7,200,000 in manufacturing overhead during the coming year. Additionally, he estimated the company would operate at a level requiring 400,000 direct labor hours and 400,000 machine hours. (a) Assume that Wilson Company uses direct labor hours as its manufacturing overhead application base. Calculate the company's predetermined overhead rate. Company's predetermined overhead rate $ eTextbook and Media Save for Later /DLH Attempts: 0 of 4 used (b) The parts of this question must be completed in order. This part will be available when you complete the part above. (c) The parts of this question must be completed in order. This part will be available when you complete the part above. (d) The parts of this question must be completed in order. This part will be available when you complete the part above. Submit Answer
Practice Problem 9 Job No.206 incurred the following costs: Wages: Department X - 400 labor hours @ RO 5 per hour. Department Y - 700 labor hours @ RO 6 per hour. Direct Material RO 5,000. Factory Overheads are absorbed on direct labour hours and the rate for department X is RO 7 per hour and department Y is RO 4 per hour. The profit is 25% on sales. The administrative overhead is 10% on factory cost. Calculate the selling Practice problem 10 Job A incurred the following costs: Department X 700 labour @ OMR 3 Department Y 500 labour @ OMR 8 Direct material OMR 5,000 Factory overheads are absorbed on direct labor hours and the rate for department X is OMR 5 per hour and department Y is OMR 3 per hour. The profit is 20% on sales. The administrative overhead is 15% on works cost. Calculate the selling price of the job. Practice problem 11 Direct materials issued to production: $180,000 Indirect materials issued to production: $16,000 Direct labor cost: $214,000 Manufacturing overhead cost…
Problem 18-58 (Algo) Productivity Measures (LO 18-6) As the cost accounting manager at Cambria Chemicals (CC). you are responsible for compiling and reporting various performance measures to the senior managers. The company instituted many efficiency improvement programs recently, and the CFO has asked you to measure and report partial productivity for both labor and materlals. Data for the last two years follow. Year 2 Year 1 Gallons input (thousands) Labor-hours (thousands) Gallons of output (thousands) 10,000 9,200 11,800 9,000 6,800 9,800 From the accounting records, you also gather the following Information for the two years. Year 2 Year 1 Cost of inputs (per gallon) Wage rate (per hour) Total manufacturing overhead Selling price of output (per gallon) 84 $. 90 17 $1,170, 000 375 23 $1,360,000 .370 Required: a. Compute the total factor productivity measures for year 1 and year 2 based on the three inputs (material, labor, and overhead). (Round your answers to 3 declmal places.)…
Question 2 The Teala Company uses standard costing in its manufacturing plant for auto parts. Standard machine time is 6.5 machine hours per unit. The standard cost of a particular auto part, based on a denominator level of 4,500 output units per year, included variable manufacturing overhead at $8 per hour. Budgeted fixed overhead was $351,000. Actual output produced was 4,400 units. Variable manufacturing overhead incurred was $217,000. Fixed manufacturing overhead incurred was $373,000. Actual machine-hours were 28,400. Required: 1.Calculate the following variances in the table. Detailed computations are required. Production- Volume 4-Variance Analysis Variable Overhead Fixed Overhead Spending Variance Efficiency Variance Variance F F Never a variance ل し Never a variance 2.Prepare journal entries for variable and fixed manufacturing overhead costs and variances; write off these variances to cost of goods sold.
QUESTION THREE Hamad Woodworking uses normal costing and allocates manufacturing overhead to jobs based on direct labor hours. During 2014, Hamad recorded the following data: Budget manufacturing overhead costs Budgeted direct labour hours Actual manufacturing overhead costs Actual direct labour hours The following additional data were provided for Job 101: Direct materials $80,000 Direct labour 100,000 Direct labour hours 150 Machine hours 200 Required: 1. Compute the cost of Job 101 using normal costing. 2. Compute the overhead under or overallocated. 3. Explain the characteristics of a job costing system. $4,400,000 200,000 4,650,000 212,000
job #309 incurrerrd $900 of direct material, 30 hours of direct labor at $40 per hour, 80 machine hours and 5 inspctions
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Exercise 17-15 (Algo) Computing activity rates, overhead allocation, and cost per unit LO P3 Lucern Company reports the following for its overhead cost for the year. Activity Budgeted Cost Budgeted Activity Usage Engineering support $ 34,300 70 design changes Electricity 35,400 3,540 machine hours Setup 58,800 490 setups 1. Compute the activity rate for each activity using activity-based costing.2. The company’s Pro model used these activities to produce 1,200 units during the year: 2 design changes, 130 machine hours, and 10 setups. Allocate overhead cost to the Pro model and compute its overhead cost per unit using activity-based costing.
Exercise 7-42 (Algo) Job Costing in a Service Organization (LO 7-4) Allocation Busters (AB) is a dispute mediation firm offering services to firms in disputes about cost allocations with government agencies. For March, AB worked 440 hours for Massive Airframes and 671 hours for Gigantic Drydocks. AB bills clients at the rate of $515 per hour; labor cost for its professional staff is $210 per hour. Overhead costs in March totaled $41,010. Overhead is applied to clients at $44 per labor-hour. In addition, AB had $199,700 in marketing and administrative costs. All transactions are on account. All services were billed. Transaction Description (a) Record Labor cost (b) Record Applied Service Overhead (c) Record Cost of services billed (d) Record Actual Service Overhead Required: a. Show labor and overhead cost flows through T-accounts. b. Prepare an income statement for the company for March.
QUESTION 6 Quiche & Tell, Inc., is a catering business. Direct labor costs are $15 per hour and overhead is allocated to jobs at a rate of $10 per direct labor hour. Catering for the Eggsetera, Inc. party cost $1,000 for direct materials and took 20 direct labor hours. Calculate the total cost of the Eggsetera's party.