Waterway Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2)a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi-purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds ofmulti-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual directlabor hours are 96,300 or [1.5 hours x (54,000+ 10,200)]. Estimated annual manufacturing overhead is $1,573,108. Thus, thepredetermined overhead rate is $16.34 or ($1,573,108 ÷96,300) per direct labor hour. The direct materials cost per unit is $18.50 forthe home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercialmodels.The company's managers identified six activity cost pools and related cost drivers and accumulated overhead by cost pool as follows.Activity Cost PoolsReceivingFormingAssemblingTestingPaintingPacking and shippingActivity Cost PoolReceivingFormingAssemblingTestingPaintingPacking and shippingTotal costs assigned (a)Units produced (b)Cost DriversOverhead cost per unit [(a) + (b)]PoundsMachine hoursNumber of partsNumber of testsGallonsPoundsUse of Driversby Product$$$$$Estimated Overhead$$87,100Home Model150,150Activity-BasedOverhead Rates399,28047,940$1,573,10857,838830,800Prepare a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. (Round overhead cost per unit to 2 decimal places, e.g. 12.25 and cost assigned to 0 decimal places, e.g. 2,500.)$$$Estimated Use ofCost DriversCost Assigned335,00035,000217,00025,5005,258335,000Use ofDrivers by ProductUse of Driversby ProductHome215,00027,000165,00015,5003,680215,000$$$$$Commercial$120,0008,00052,00010,0001,578120,000Commercial ModelActivity-BasedOverhead Rates$$$Cost Assigned

Total Cost-It refers to the relationship between the unit cost of product and the number of units…

Answered: Prepare a schedule assigning each…

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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All the following statements about multiple predetermined overhead rates are correct , EXCEPT : a. They are calculated for each department by dividing total estimated manufacturing overhead cost by total actual units of the allocation base . b. They are calculated at the beginning of the accounting period once the actual amount of manufacturing overhead is known . c. They improve job - order costing's accuracy accounting for costs . d .All the given answers are correct . e . They are based on estimated total manufacturing overhead costs
1. Determine the total estimated overhead cost for each of the producing departments after allocating the cost of the service department. A. Using employee headcount as the allocation base. B. Using occupied space as the allocation base. C. Using productive capacity as the allocation base. D. Using the 3-year average use as the allocation base.
! Required information Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows: Activity Cost Pools Machining Designing costs Setup costs Total Cost of Pool Number of machine hours Number of design hours. Number of batches. Cost Driver $416,700 Number of machine hours 93,100 Number of design hours 73,338 Number of batches Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows: Estimated Cost Driver 92,600 9,500 510 Product A Product B Product C 36,000 46,000 10,600 3,800 2,100 3,600 285 50 175
Ramsey Company produces speakers (Model A and Model B). Both products pass through two producing departments. Model A's production is much more labor-intensive than that of Model B. Model B is also the more popular of the two speakers. The following data has been gathered for the two products: Units produced per year Prime costs Direct labor hours Machine hours Production runs Inspection hours Maintenance hours Overhead costs: Setup costs Inspection costs Machining Maintenance Total Model A 10,000 $153,000 144,000 17,000 30 900 9,000 $216,000 220,000 172,000 300,000 $908,000 Product Data Model B 100,000 $1,530,000 310,000 204,000 60 1,300 91,000
Jackson Foundry uses a predetermined overhead allocation rate to allocate overhead to individual jobs, based on the machine hours required. (Click the icon to view the costs.) Requirements 1. 2. 3. Compute Jackson's predetermined overhead allocation rate. Prepare the journal entry to allocate manufacturing overhead. Post the manufacturing overhead transactions to the Manufacturing Overhead T-account. Is manufacturing overhead underallocated or overallocated? By how much? 4. Prepare the journal entry to adjust for the underallocated or overallocated manufacturing overhead. Does your entry increase or decrease Cost of Goods Sold? Print Allocated overhead to WIP Done - X Data table At the beginning of 2024, the company expected to incur the following: Manufacturing overhead costs Direct labor costs $880,000 1,540,000 Machine hours 80,000 hours At the end of 2024, the company had actually incurred: Direct labor costs Depreciation on manufacturing plant and equipment Property taxes on plant…
please solve for overhead rate per direct labor cost, overhead rate per direct labor hour, and overhead rate per machine hour
Select each of the items with the best description of its purpose. Description Items 1. Holds indirect cost until assigned to production. 2. Used when materials move continuously through a manufacturing process. 3. Hold production costs until products are transferred from production to finished goods (or another department). 4. Computes equivalent units only on production activity in the current period. 5. Standardizes partially completed units into equivalent completed units. 6. Combined costs of direct labor and overhead per equivalent unit. 7. Holds costs of finished products until sold to customers.
Round off all amounts to three decimal places. direct materials cost. Factory overhead is allocated on the basis of direct labor cost Reguired: The amount of direct labor and the amount of factory overhead in Finished Goods for Ser
2. Austin Electronics manufactures two large-screen television models: the Royale, which sells for $1,600, and a new model, the Majestic, which sells for $1,300. Few per unit cost data are given: Traditional Costing DM Royale $850 Majestic $570 DL ($20 per hour) MOH ($38 per DLH) $140 $248 $100 $190 In 2017, Austin manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $38 per direct labor hour was determined by dividing total expected manufacturing overhead of $7,600,000 by the total direct labor hours (200,000) for the two models. Management is considering phasing out the Royale model (comparatively low profit) and increasing the production of the Majestic model Before finalizing its decision, management asks Austin's controller to prepare an analysis using activity-based costing (ABC). The controller accumulates the following information about overhead for the year ended December 31, 2017. Est. Overhead Activity | Level 40,000 18,000…
The equivalent units for the FIFO unit cost represent: a. work done during the current period. b. work done during the current period and the previous period. c. work done on units completed during the current period. d. work done during the previous period. e. the same thing as the equivalent units for the weighted average unit cost.
When using a normal costing system direct material and direct labor are recorded at standard cost and overhead is treated as a period cost. direct material and direct labor are recorded at actual cost and overhead is treated as a period cost. direct material and direct labor are recorded at standard cost and overhead is applied to products using a predetermined overhead rate. direct material and direct labor are recorded at actual cost and overhead is applied to products using a predetermined overhead rate.
24: Seat Belt Inc., produces three sizes of seat belts: small, medium, and large. A seat belt pattern is first stenciled onto fabric in the Pattern Department. The stenciled patterns are then sent to the Cut and Sew Department, where the seat belt is cut and sewed together. Seat Belt Inc. uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows: Overhead Dollars Direct Labor Hours Pattern Department: Cut and Sew Department Overhead: 40,000 dh 60,000 dlb $300,000 $600,000 $900,000 Totals: 100,000 The Company decides to use the Multiple Department Overhead method, and Direct Labor Hours are used to allocate the overhead. We know the following for each type of seatbelt: Small Medium 1.0 dlh 1.5 dlb 2.5 dlh Large 2.0 dlh 3.0 dlb 5.0 dla Pattern Department: Cut and Sew Department: 1.5 dla 2.5 dlh 4.0 dlk Total Per Unit Part I: Calculate the Departmental Factory Overhead Rate for each…

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