General accounting question Parker Manufacturing's Maintenance Department services two productiondepartments: Molding and Finishing. Maintenance costs are allocatedbased on machine hours. The following data was recorded for the pastyear:Budgeted Machine Actual Machine Peak-Period MachineDepartmentMolding 30,000HoursHoursHours45,00060,000Finishing 90,000105,000120,000Total120,000150,000180,000Additional information:Budgeted Variable Maintenance Costs: $300,000⚫ Actual Variable Maintenance Costs: $412,500Question;How much of the $412,500 actual variable maintenance costs should not becharged to the production departments?

Given:Budgeted variable maintenance costs = $300,000Actual variable maintenance costs =…

Answered: Parker Manufacturing's Maintenance…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

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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
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.)
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A company has identified the following overhead costs and cost drivers for the coming year. Overhead item Cost driver Budgeted Activity Budgeted Overhead Machine set – up Number of sets – up 200 P 20,000 Inspection Number of inspections 6,500 P130,000 Material handling Number of materials moves 8,000 P 80,000 Engineering Number of engineering hours 1,000 P 50,000 Total P 280,000 The following information was collected on three jobs that were completed during the year: Job 101 Job 102 Job 103 Direct materials P 5,000…
A manufacturer uses machine hours to assign overhead costs to products. Budgeted information for the next year follows. Budgeted factory overhead costs Budgeted machine hours Compute the plantwide overhead rate for the next year based on machine hours. Plantwide overhead rate $431,200 5,600 per MH
The cost formula for the maintenance department of Rainbow Ltd. is $19,400 per month plus $7.70 per machine hour used by the production department.Required:a. Calculate the maintenance cost that would be budgeted for a month in which 6,700 machine hours are planned to be used. b. Prepare an appropriate performance report for the maintenance department assuming that 7,060 machine hours were actually used in the month of May and that the total maintenance cost incurred was $68,940. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Nafth Company has an Equipment Services Department that performs all needed maintenance work on the equipment in the company's Fabrication and Assembly Departments. Costs of the equipment Services Department are charged to the Fabrication and Assembly Departments on the basis of direct labor-hours. Data on direct labor-hours for last year follow: Budgeted direct labor-hours Actual direct labor-hours Peak-period direct labor-hours Fabrication Assembly Total 21,000 51,000 72,000 26,000 56,000 82,000 31,000 71,000 102,000 For the year just ended, the company budgeted its variable maintenance costs at $220,000 for the year. Actual variable maintenance costs for the year totaled $265,000. For performance evaluation purposes, how much of the $265,000 of actual variable maintenance cost should be charged to the Assembly Department at the end of the year just ended? Note: Do not round your intermediate calculations.
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The cost formula for the maintenance department of Rambo Limited is $19,200 per month plus $7.50 per machine hour used by the production department. Required: a. Calculate the maintenance cost that would be budgeted for a month in which 6,600 machine hours are planned to be used. b. Prepare an appropriate performance report for the maintenance department assuming that 7,100 machine hours would be used in the month of May and that the total actual maintenance cost incurred in May was $68,950. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the maintenance cost that would be budgeted for a month in which 6,600 machine hours are planned to be used. Maintenance cost
The following information is provided for the year: Actual overhead $225,000 Actual machine hours worked 25,000 Budgeted machine hours 20,000 Applied overhead $200,000 The budgeted overhead used to calculate the predetermined rate must have been
Huxtable charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of machine hours. The following data pertain to the current year: Budgeted manufacturing overhead: $430,000 Actual manufacturing overhead: $440,000 Budgeted machine hours: 20,000 Actual machine hours: 16,000 Overhead applied to production totaled: Select one: a. $352,000 b. $384,000 c. $550,000 d. $600,000 e. some other amount

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