Problem 4. Rocky Tailoring has three departments: design, machine sewing, andbeading. The design department overhead consists of computers and software forcomputer-assisted design. The machine sewing department overhead consists ofthread, sewing machines, and small tools. The beading department has very littleoverhead, just thread and some glue and all departments are assigned a share ofutilities, rent, and others. Information on estimated overhead and direct labor hoursfor the year by department are as followsEstimated OverheadDesign department P110, 00084,0006,000Estimated DLH4,00014,0002,000Sewing departmentBeading departmentRocky Tailoring has just accepted a contract for forty new tutus for the nutcrackerballet. The costs are direct materials, P30, 000; direct labor. 25 hrs. At P25 per hr.of Design works, 320 hours of sewing time at P15 per hour and 200 hours of beadingat P20 per hr. Rocky Tailoring uses plant wide rate based on direct labor hours foroverhead application and charges customers at cost plus 30%.REQUIRED:a) Compute for the pre-determined overhead rateb) Compute for the total overhead applied to the jobc) Determine the total cost of the jobd) Determine the billing price

Overhead means the cost incurred indirect in factory for the production of goods. Total cost placed…

Answered: Problem 4. Rocky Tailoring has three…

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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Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control From: Service department costs Repair Quality control Total Direct Costs Repair $ 132,600 94,200 40,200 242,740 Proportion of Services Used by Quality Control 0 0.3 Repair 0.3 0 Fabricating Finishing Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts. Quality Control Cost Allocation To: 0.5 0.1 0.2 0.6 Fabricating Finishing
Show Me How Support department cost allocation- Martay Creations produces winter scarves. The scarves are produced in the Cutting and Sewing departments. The Maintenance and Security departments support these production departments, and allocate costs based on machine hours and square feet, respectively. Information about each department is provided in the following table: Department Maintenance Department Security Department Cutting Department Sewing Department Total Cost Number of Employees $2,200 5 4,500 3 21,200 21 24,900 19 Machine Hours 40 Square Feet 600 0 500 3,600 2,400 5,400 3,000 Using the sequential method and allocating the support department with the highest costs first, allocate all support department costs to the production departments. Then compute the total cost of each production department. Cutting Department Sewing Department Production departments' total costs $ D
After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey decides to analyze overhead cost at Business Solutions. In a recent month, Santana found that setup costs, inspection costs, and utility costs made up most of the company's overhead. Additional information about overhead follows. Activity Set up Inspection Utilities Total Budgeted Cost $ 24,920 The following data pertain to Job 615. $ 2,500 $ 3,300 $ Direct materials. Direct labor Overhead Setups Parts inspected Machine hours 5,400 10,800 $ 41,120 Setup Inspection Utilities Budgeted Activity Usage 28 setups 5,400 parts inspected 5,400 machine hours (MH) 5 setups 590 parts inspected 610 machine hours. Required: 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,400 machine hours. Compute total product cost of Job 615. 3. Assume…
Martay Creations produces winter scarves. The scarves are produced in the Cutting and Sewing departments. The Maintenance and Security departments support these production departments, and allocate costs based on machine hours and square feet, respectively. Information about each department is provided in the following table: Department Total Cost Number of Employees Machine Hours Square Feet Maintenance Department $2,200 5 40 600 Security Department 4,500 3 0 500 Cutting Department 21,200 21 3,600 2,400 Sewing Department 24,900 19 5,400 3,000 Using the sequential method and allocating the support department with the highest costs first, allocate all support department costs to the production departments. Then compute the total cost of each production department. Line Item Description CuttingDepartment SewingDepartment…
1. Calculate the overhead rate based on the traditional overhead allocation method using direct labour hours as the base. 2. Calculate the total overhead applied to order no. 147 using the traditional overhead rate calculated in question 3.1 above. 3. Using activity based costing (ABC), calculate the overhead rate for the following activity: Purchasing. That is, what is the overhead rate per purchase order?
Calley's Cakes Inc. produces quality specialty cakes. Her cakes move through two departments: Baking and Frosting. The company uses departmental overhead rates to allocate overhead costs. Overheads are allocated based on oven-hours for Baking and direct labour cost for Frosting. Information related to costs for last month is provided below: Annual production and sales (units) Direct materials cost per unit Direct labour cost per unit: Baking department Frosting department Oven-hours per unit Baking department Frosting department 10-inch cake. 5,900 5.40 5.00 7.50 0.25 0.00 8-inch glazed cake 9,350 4.30 4.50 8.00 0.25 0.50 In addition, the company budgets manufacturing overhead at $49,250 in the Baking department and $55,500 in the Frosting department. Required: 1. Determine the overhead application rate for each department 2. Determine the total cost per unit of the two types of cakes (10-inch and 8-inch glazed)
Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Required: Use the reciprocal method to allocate the service costs. (Matrix algebra is not required.) Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.
2
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Problem 18: Predetermined Factory Overhead believes that the company would be better if it will use two factory overhead single factory overhead rate that is based on machine hours. Its manager Davao Corp. uses job order costing system to produce its products. It uses a rates, one based on material costs and the other one is based machine hours. The following data are for year 2020: Materials related Factory overhead Machine related Factory overhead Total Budgeted Factory overhead Costs of materials used on jobs Total Machine hours Data related to three jobs worked on in December follow: Material Costs Direct Labor Costs Machine Hours used Job # 1 168,000 128,000 68,000 Budgeted FOH 3,840,000 10,400,000 14,240,000 Job # 2 656,000 104,000 36,000 Job Order Costing 12,800,000 1,600,000 Job # 3 312,000 144,000 23,200 Actual factory overhead related to materials was P318,400 and actual factory overhead related to machine hours was P846,400. Required: 1. Determine the predetermine factory…

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