Off the Beaten Path Running Company has started to produce running apparel in addition to the trail running shoes that they have manufactured for years. They feel that a departmental overhead rate would best reflect their overall manufacturing overhead usage. Based on research the following information was gathered for the upcoming year: Machining Department Finishing Department Estimated Manufacturing Overhead by Department $800,000 $300,000 Trail Running Shoes 440,000 machine hours 8,000 direct labor hours Running Apparel 60,000 machine hours 72,000 direct labor hours Manufacturing overhead is driven by machine hours for the machining department and direct labor hours for the finishing department. At the end of the year, the following information was gathered related to the production of the trail running shoes and running apparel: Machining Department Finishing Department Trail Running Shoes 442,000 hours 7,500 hours Running Apparel 57,000 hours 73,000 hours How much manufacturing overhead will be allocated to the trail running shoes? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.) A. $735, 325 B. $736, 568 C. $275, 000 D. $1,100, 275
Off the Beaten Path Running Company has started to produce running apparel in addition to the trail running shoes that they have manufactured for years. They feel that a departmental overhead rate would best reflect their overall manufacturing overhead usage. Based on research the following information was gathered for the upcoming year: Machining Department Finishing Department Estimated Manufacturing Overhead by Department $800,000 $300,000 Trail Running Shoes 440,000 machine hours 8,000 direct labor hours Running Apparel 60,000 machine hours 72,000 direct labor hours Manufacturing overhead is driven by machine hours for the machining department and direct labor hours for the finishing department. At the end of the year, the following information was gathered related to the production of the trail running shoes and running apparel: Machining Department Finishing Department Trail Running Shoes 442,000 hours 7,500 hours Running Apparel 57,000 hours 73,000 hours How much manufacturing overhead will be allocated to the trail running shoes? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.) A. $735, 325 B. $736, 568 C. $275, 000 D. $1,100, 275
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
100%
Off the Beaten Path Running Company has started to produce running apparel in addition to the trail running shoes that they have manufactured for years. They feel that a departmental overhead rate would best reflect their overall manufacturing overhead usage. Based on research the following information was gathered for the upcoming year:
|
|
Machining Department
|
Finishing Department
|
|
Estimated Manufacturing Overhead by Department
|
$800,000
|
$300,000
|
|
Trail Running Shoes
|
440,000
machine hours |
8,000
direct labor hours |
|
Running Apparel
|
60,000
machine hours |
72,000
direct labor hours |
Manufacturing overhead is driven by machine hours for the machining department and direct labor hours for the finishing department.
At the end of the year, the following information was gathered related to the production of the trail running shoes and running apparel:
|
|
Machining Department
|
Finishing Department
|
|
Trail Running Shoes
|
442,000
hours |
7,500
hours |
|
Running Apparel
|
57,000
hours |
73,000
hours |
How much manufacturing overhead will be allocated to the trail running shoes? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)
A. $735, 325
B. $736, 568
C. $275, 000
D. $1,100, 275
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education