Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $588,000 payroll for 7,000 direct labor-hours. Listed below is cost driver information used in the product-costing system. ### Total Manufacturing Overhead Using Direct Labor-Hours: Power CompanyPower Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes a $588,000 payroll for 7,000 direct labor-hours. Listed below is cost driver information used in the product-costing system:| Overhead Cost Pool | Budgeted Overhead | Cost Driver | Estimated Cost Driver Level ||--------------------|-------------------|-------------|-----------------------------|| Machine setups | $1,098,950 | Number of setups | 250 setups || Materials handling | $112,200 | Number of barrels | 9,350 barrels || Quality control | $888,000 | Number of inspections | 2,400 inspections || Other overhead cost| $703,000 | Number of machine hours | 18,500 machine hours || **Total overhead** | **$2,802,150** | - | - |A current product order has the following requirements:- **Machine setups:** 22 setups- **Materials handling:** 684 barrels- **Quality inspections:** 87 inspections- **Machine hours:** 1,400 machine hours- **Direct labor hour:** 492 hours### Question:What is the total manufacturing overhead for the current product order if the firm uses a plantwide rate based on direct labor-hours? (Round your intermediate calculation to 2 decimal places.)### Solution:#### Step 1: Determine the Plantwide Overhead RateFirst, calculate the plantwide overhead rate based on direct labor-hours.\[ \text{Plantwide Overhead Rate} = \frac{\text{Total Budgeted Overhead}}{\text{Total Direct Labor-Hours}} \]\[ \text{Plantwide Overhead Rate} = \frac{ $2,802,150 }{ 7,000 \text{ hours} } \]\[ \text{Plantwide Overhead Rate} = 400.3071428571 \]\[ \text{Plantwide Overhead Rate} = 400.31 \, \text{(Rounded to 2 decimal places)} \]#### Step 2: Calculate the Overhead for the Current Product OrderNext, multiply the plantwide overhead rate by the direct labor-hours for the current product order.\[ \text{Total Manufacturing Overhead} = \text{

Name: Power Company manufactures a variety of drill bits. The company's plan
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $588,000 payroll for 7,000 direct labor-hours. Listed below is cost driver information used in the product-costing system

Plantwide rate based on direct labor-hours=Total overheadTotal direct labor-hours

Business

Accounting

Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $588,000 payroll for 7,000 direct labor-hours. Listed below is cost driver information used in the product-costing system: Budgeted Overhead Cost Driver Overhead Cost Pool Machine setups Materials handling Estimated Cost Driver Level 250 setups $ 1,098,950 Number of setups Number of barrels 9,350 barrels Quality control Number of inspections. 112,200 888,000 703,000 $ 2,802,150 2,400 inspections 18,500 machine hours Other overhead cost. Number of machine hours Total overhead A current product order has the following requirements: 22 setups Machine setups Materials handling 684 barrels Quality inspections Machine hours 87 inspections 1,400 machine hours Direct labor hour 492 hours What is the total manufacturing overhead for the current product order if the firm uses a plantwide rate based on direct labor-hours? (Round your intermediate calculation to 2 decimal places.)

Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $588,000 payroll for 7,000 direct labor-hours. Listed below is cost driver information used in the product-costing system: Budgeted Overhead Cost Driver Overhead Cost Pool Machine setups Materials handling Estimated Cost Driver Level 250 setups $ 1,098,950 Number of setups Number of barrels 9,350 barrels Quality control Number of inspections. 112,200 888,000 703,000 $ 2,802,150 2,400 inspections 18,500 machine hours Other overhead cost. Number of machine hours Total overhead A current product order has the following requirements: 22 setups Machine setups Materials handling 684 barrels Quality inspections Machine hours 87 inspections 1,400 machine hours Direct labor hour 492 hours What is the total manufacturing overhead for the current product order if the firm uses a plantwide rate based on direct labor-hours? (Round your intermediate calculation to 2 decimal places.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Greenwood Company manufactures two products—13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 235,200 12,000 MHs Machine setups Number of setups $ 73,600 160 setups Production design Number of products $ 80,000 2 products General factory Direct labor-hours $ 295,200 12,000 DLHs Activity Measure Product Y Product Z Machining 7,600 4,400 Number of setups 40 120 Number of products 1 1 Direct labor-hours 7,600 4,400 11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product…
Carter Company manufactures two products, Deluxe and Regular, and uses a traditional two-stage cost allocation system. The first stage assigns all factory overhead costs to two production departments, A and B. based on machine hours. The second stage uses direct labor hours to allocate overhead to individual products. For the current year, the firm budgeted $1,550,000 total factory overhead cost. The $1,550,000 was for the planned levels of machine and direct labor hours shown in the following table. Machine hours Direct labor hours Units produced and sold Unit cost of direct materials The following information relates to the firm's operations for the month of January: Hourly direct labor wage rate Direct labor hours in Department A per unit Direct labor hours in Department B per unit Activity Material movement Machine setups Inspections Shipment Production Production Department A Department B 6,200 31,000 1. Deluxe unit cost Regular unit cost 2. Deluxe unit overhead Regular unit…
Ivanhoe, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 200 pressure gauges were produced, and overhead costs of $87,970 were estimated. An analysis of estimated overhead costs reveals the following activities. Activities Cost Drivers Total Cost 1. Materials handling Number of requisitions $37,800 2. Machine setups Number of setups 28,320 3. Quality inspections Number of inspections 21.850 $87,970 The cost driver volume for each product was as follows. Cost Drivers Instruments Gauges Total Number of requisitions 405 645 1.050 Number of setups 190 290 480 Number of inspections 230 245 475
Blue Outdoor Stores Inc. uses a perpetual inventory system and has a beginning inventory, as at April 1, of 143 tents. This consists of 51 tents purchased in February at a cost of $213 each and 92 tents purchased in March at a cost of $227 each. During April, the company had the following purchases and sales of tents: Purchases Sales Date Units Unit Cost Units Unit Price Apr. 3 74 $418 10 199 $275 17 238 418 24 287 284 30 208 418 (a) Determine the cost of goods sold and the cost of the ending inventory using FIFO. Cost of goods sold $ Ending inventory $
Pronghorn Industries has three activity cost pools and two products. It estimates production 2,000 units of Product BC113 and 1,000 of Product AD908. Having identified its activity cost pools and the cost drivers for each pool, Pronghorn accumulated the following data relative to those activity cost pools and cost drivers. Activity Cost Pools Machine setup Machining Packing (a) Annual Overhead Data Activity Cost Pools Machine setup Using the above data, do the following: Machining Packing Cost Drivers $ Setups $ Machine hours Orders Estimated Overhead Estimated Overhead $17,500 120,750 28,670 Use of Cost Drivers per Product Estimated Use of Cost Drivers per Activity 35 Prepare a schedule showing the computations of the activity-based overhead rates per cost driver. 4,830 470 Estimated Use of Cost Drivers per Activity setups machine hours Product BC113 orders 20 1,140 120 $ $ $ Product AD908 15 3,690 350 Activity-Based Overhead Rates per setup per machine hr. per order
Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $492,000 payroll for 5,800 direct labor-hours. Listed below is cost driver information used in the product-costing system: Overhead Cost Pool Budgeted Overhead Cost Driver Estimated Cost Driver Level Machine setups $ 464,950 Number of setups 170 setups Materials handling 107,400 Number of barrels 8,950 barrels Quality control 464,000 Number of inspections 1,600 inspections Other overhead cost 319,000 Number of machine hours 14,500 machine hours Total overhead $ 1,355,350 A current product order has the following requirements: Machine setups 14 setups Materials handling 636 barrels Quality inspections 83 inspections Machine hours 1,000 machine hours Direct labor hour 396 hours Using activity-based costing, how much quality control overhead is assigned to the order? Multiple Choice $130,186.…
Greenwood Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 227,700 11,000 MHs Machine setups Number of setups $ 153,900 270 setups Production design Number of products $ 91,000 2 products General factory Direct labor-hours $ 257,000 10,000 DLHs Activity Measure Product Y Product Z Machining 8,700 2,300 Number of setups 60 210 Number of products 1 1 Direct labor-hours 8,700 1,300 Required: 1. What is the company’s plantwide overhead rate? (Round your answer to 2 decimal places.) PLEASE ROUND TO…
BrightWater, LLP uses a standard costing system to collect costs related to the production of its mineral-infused water. The direct labor standard for each unit is 1.25 hours at a standard cost of $11.00 per hour. During the month of November, BrightWater’s unit production used 9,820 direct labor hours at a total direct labor cost of $106,547. This resulted in production of 8,500 units for November. What is BrightWater’s labor efficiency variance for November? Select one: a. $10,328 favorable. b. $13,047 unfavorable. c. $8,855 favorable. d. $14,520 unfavorable. e. Unable to calculate from the information given.
Greenwood Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 231,000 11,000 MHs Machine setups Number of setups $ 180,000 300 setups Production design Number of products $ 94,000 2 products General factory Direct labor-hours $ 260,000 10,000 DLHs Activity Measure Product Y Product Z Machining 9,000 2,000 Number of setups 60 240 Number of products 1 1 Direct labor-hours 9,000 1,000 5. What is the activity rate for the Product Design activity cost pool?
Dawson Company manufactures small table lamps and desk lamps. The following shows the activities per product and the total overhead information: Line Item Description Units Setups Inspections Assembly (dlh) Small table lamps 4,000 3,500 9,450 45,600 Desk lamps 8,100 7,000 15,750 45,600 Activity Total Activity-Base Usage Budgeted Activity Cost Setups 10,500 $95,550 Inspections 25,200 168,840 Assembly (dlh) 79,800 255,360 The total factory overhead to be allocated to desk lamps is a. $315,145 b. $409,689 c. $567,261 d. $189,087
Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 54,000 machine-hours would be required for the period's estimated level of production. It also estimated $1,040,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $5.00 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 Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour Job D-70 Direct materials cost Direct labor cost Machine-hours Job C-200 Direct materials cost Direct labor cost Machine-hours During the year, the company had no beginning or ending inventories and it…
Maxey & Sons manufactures two types of storage cabinets-lype A and Type B-and applies manufacturing overhead to all units at the rate of $120 per machine hour. Production information follows. Descriptions Anticipated volume (units) Direct-material cost per unit Direct-labor cost per unit Descriptions The controller, who is studying the use of activity-based costing, has determined that the firm's overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities' three respective cost drivers, follow. Setups Machine hours Outgoing shipments Type A 140 48,000 200 Required 1 Type A 24,000 $28 33 Required 2 Required 3 The firm's total overhead of $13,860,000 is subdivided as follows: manufacturing setups, $3,024,000; machine processing. $8,316,000; and product shipping, $2,520,000. Required: 1. Compute the unit manufacturing cost of Type A and Type B…