20 Pope Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-ordercosting system and computes predetermined overhead rates on a quarterly basis using the number of units to be produced asthe allocation base. Its estimated costs for the next two quarters are given below:First QtrSecond Qtr288,000 $160,000240,000$Direct materials$140,00080,000220,000440,000Direct laborManufacturing overheadTotal manufacturing costs688,000 $Number of units to be producedEstimated unit product cost160,000$80,0004.30$5.50648,000192,000200,000220,000E. None of the aboveBased on the information given, estimate the fixed manufacturing overhead cost per quarter.А. $В. $С. $D. $

Solution: Variable manufacturing overhead per unit = (Manufacturing overhead at 160000 units -…

Answered: Pope Company makes a single product…

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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Tillman Corporation uses a Job Order Costing system and has two production departments--Molding and Assembly. The company applies manufacturing overhead to production orders on the basis of direct labor costs. Separate departmental predetermined overhead rates are used. Budgeted manufacturing costs for the year are as follows: Molding Assembling Direct Materials P700,000 P100,000 Direct Labor 200,000 800,000 Manufacturing Overhead 600,000 400,000 The actual material and labor costs charged to Job 432 were as follows: Direct Materials 25,000 Direct Labor Molding 8,000 Assembling 12,000 20,000 Tillman applies manufacturing overhead to production orders on the basis of direct labor cost using a departmental rate predetermined at the beginning of the year based on the annual budget. The total manufacturing cost associated with Job 432 should be?
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…
Snyder Company produced 85,600 units during its first year of operations and sold 81,750 at $22.30 per unit. The company chose practical activity-at 85,600 units-to compute its predetermined overhead rate. Manufacturing costs are as follows: Direct materials Direct labor $504,184 121,552 Expected and actual variable overhead 379,208 Expected and actual fixed overhead 460,528 Requlred: If required, round unit cost answers to the nearest cent. 1. Calculate the unit cost and the cost of finished goods inventory under absorption costing. Unit Cost Cost of finished goods inventory 2 Calculate the unit cost and the cost of finished goods inventory under variable costing. Unit Cost Cost of finished goods inventory
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:QuarterFirst Second Third FourthDirect materials $ 320,000 $ 160,000 $ 80,000 $ 240,000Direct labor 160,000 80,000 40,000 120,000Manufacturing overhead 230,000 206,000 194,000 ?Total manufacturing costs (a) $ 710,000 $ 446,000 $ 314,000 $ ?Number of units to be produced (b) 160,000 80,000 40,000 120,000Estimated unit product cost (a) ÷ (b) $ 4.44 $ 5.58 $ 7.85 $ ?Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with manufacturing overhead because it is the largest…
Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below: Quarter First Second Third Fourth Direct materials $ 320,000 $ 160,000 $ 80,000 $ 240,000 Direct labor 80,000 40,000 20,000 60,000 Manufacturing overhead 230,000 206,000 194,000 ? Total manufacturing costs (a) $ 630,000 $ 406,000 $ 294,000 $ ? Number of units to be produced (b) 80,000 40,000 20,000 60,000 Estimated unit product cost (a) ÷ (b) $ 7.88 $ 10.15 $ 14.70 $ ? Management finds the variation in quarterly unit product costs to be confusing and difficult to work with. It has been suggested that the problem lies with…
Red Industries produces computers and goes through two operations, Assembling and Packaging before it is ready to be sold to customers. Next year's expected costs and activities are shown below. Data for Dept. Overhead costs Assembling Direct labor 401,000 DLH 99,000 hours Machine hours Packaging $ 586,600 72,000 MH 80,000 MH DLH $ 413,400 1. Compute Red's departmental overhead rate for the Assembling department based on direct labor hours. 2. Compute Red's departmental overhead rate for the Packaging department based on machine hours. 3, Compute a single plantwide rate based on machine hours. Show your work with an Excel spreadsheet or in a Word file.
Delph Delph Company uses a job-order costing system with a plantwide predetermined overhead rate based on machine- hours. At the beginning of the year, the company estimated that 56,000 machine-hours would be required for the period's estimated level of production. It also estimated $1,000,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4.00 per machine-hour. Because Delph has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following information to enable calculating departmental overhead rates: Machine-hours Molding 21,000 Fabrication 35,000 Total 56,000 Fixed manufacturing overhead cost $ 780,000 $220,000 $1,000,000 Variable manufacturing overhead cost per machine-hour $ 4.00 $1.00 During the year, the company had no beginning or ending inventories and it started, completed, and…
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.…
Sherman Manufacturing Company currently manufactures a component used in one of its products. The annual production costs for 11,300 components are as follows: Material cost Labor cost Overhead Batch-level set-up costs for year Product-level manager's salary Allocated facility-level costs $ 7 per unit $ 3 per unit $ 1 per unit $ 5,700 $ 17,700 $ 11,700 An outside company has offered to supply 11,300 units of the component for $14.40 each. If the company outsources the component, it will be able to rent out the idle factory space for $2,000 per month but will not terminate the product manager. Required: a. Which items are not relevant to this outsourcing decision? b. Identify any opportunity costs associated with this decision. c. Prepare a quantitative analysis that indicates whether the component should be outsourced. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a quantitative analysis that indicates whether the component…
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A-2
Wilmington Company has two manufacturing departments--Assembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is shown below is based on estimates from the beginning of the year. The second set of data relates to one particular job completed during the year-Job Bravo. Estimated Data Manufacturing overhead costs Direct labor-hours Machine-hours Job Bravo Direct labor-hours Machine-hours Assembly $1,400,000 70,000 28,000 Assembly Fabrication 15 7 7 10 Fabrication Total $1,680,000 $3,080,000 Total 22 17 42,000 140,000 112,000 168,000 Required: 1. If Wilmington used a plantwide predetermined overhead rate based on direct labor-hours, how much manufacturing overhead would be applied to Job Bravo? 2. If Wilmington uses departmental predetermined overhead rates with direct labor-hours as the allocation base in Assembly and machine-hours as the allocation base in Fabrication, how much manufacturing overhead would be applied…

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