Product costing-various issues Clay Co. produces ceramic coffee mugs and pencil holders. Manufacturing overhead is assigned to production using an application rate based on direct labor hours. Exe LO Required: a. For 2013, the company's cost accountant estimated that total overhead costs incurred would be $420,000 and that a total of 50,000 direct labor hours would be worked. Calculate the amount of overhead to be applied for each direct labor hour worked on a production run. b. A production run of 400 coffee mugs used raw materials that cost $432 and used 40 direct labor hours at a cost of $10 per hour. Calculate the cost of each coffee mug produced. At the end of October 2013, 280 coffee mugs made in the production run in part b had been sold and the rest were in ending inventory. Calculate (1) the cost of the coffee mugs sold that would have been reported in the income statement and (2) the cost included in the October 31, 2013, finished goods inventory. с. tigol Accessories, Inc.,

Product costing-various issues Clay Co. produces ceramic coffee mugs and pencil holders. Manufacturing overhead is assigned to production using an application rate based on direct labor hours. Exe LO Required: a. For 2013, the company's cost accountant estimated that total overhead costs incurred would be $420,000 and that a total of 50,000 direct labor hours would be worked. Calculate the amount of overhead to be applied for each direct labor hour worked on a production run. b. A production run of 400 coffee mugs used raw materials that cost $432 and used 40 direct labor hours at a cost of $10 per hour. Calculate the cost of each coffee mug produced. At the end of October 2013, 280 coffee mugs made in the production run in part b had been sold and the rest were in ending inventory. Calculate (1) the cost of the coffee mugs sold that would have been reported in the income statement and (2) the cost included in the October 31, 2013, finished goods inventory. с. tigol Accessories, Inc.,

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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Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor costs to allocate overhead costs.
Bullseye Company manufactures dartboards. Its standard cost information follows: Direct materials (cork board) Direct labor Standard Quantity 0.50 square feet 0.90 hour Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($21,750/87,000) Bullseye has the following actual results for the month of September: Number of units produced and sold Number of square feet of corkboard purchased and used Cost of corkboard used Number of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cost 0.90 hour Standard Price (Rate) $ 1.30 per square feet $5.00 per hour $0.50 per hour 74,000 43,000 $ 47,200 80,000 $ 98,000 $ 103,880 $ 33,000 Standard Unit Cost $ 0.65 4.50 0.45 0.25 Required: 1. Calculate the fixed overhead spending variance for Bullseye. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). 2. Calculate the fixed overhead volume variance…
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Cruise Manufacturing has two direct cost categories direct materials and direct labor costs. The company's variable manufacturing overhead is allocated to products based on standard direct labor hours. The following information indicates the standards of Cruise's manufacturing costs Direct Cost Categories. Standard Quantity Cost per Input Unit pound Direct Materials 12 pounds per output unit $15 per Direct Labor 3 hours per output unit $21 per hour Manufacturing Overhead Cost per Input Unit Variable Manufacturing Overhead $12 per Direct Labor Hour By the end of Apr 2019 Cruise Manufacturing records indicated the following Direct materials purchased and used Direct labor Total actual variable manufacturing overhead Actual production $11.44 per pound 95,000 pounds $22 per hour 48,000 labor hours Do not enter dollar signs or commas in the input boxes Round all answers to the nearest whole number Enter the variances as positive values. Calculate the following variances. al Direct materials…
3. A company makes two products 1 and 2. The finishing activity pool has estimated manufacuring costs of $59,715 and the cost drivers for Product 1 is 226 and 377 for Product 2. The assembling activity pool has estimated costs of $32,051 and the cost drivers for Product 1 is 418 and 272 for Product 2. Direct labor hours for Product 1 is 50,000 and 45,000 for Product 2. What is the manufacturing overhead rate to be used under activity based costing for the assembly pool? Round your final answer to two decimal places and do not write a dollar sign.
A Midwest producer of specialty farming equipment, Agriboon, has three products that the company needs costing information about. The following information is available for each product. XY263 GO987 TR345 Direct material cost per unit $2.00 $8.00 $10.00 Direct labor cost per hour $15.00 $16.75 $18.00 Agriboon presently applies overhead using a predetermined rate based on direct labor hours. Estimated Direct Labor hours for the year are 132,026. The product leader for GO987 has suggested that Agriboon switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for the year: Activity Recommended Cost Driver Estimated Cost Estimated Cost Driver Units Materials Handling Requisition Request $38,912 1,216 Request Machine Operations Machine Hours $142,500 12,000 Hours Safety Compliance Compliance Test $125,000 1,100 Test Total OH…
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A company has the following overhead costs and activities: Estimated Expected Activity Product V Product W Product X Overhead Activities and Activity Measures Machine setups (setups) Processing customer orders (orders) Assembling products (assembly-hours) $9,178.00 Cost S7,234.50 $3,565.50 69 12 10 20 21 492 697 111 4. A company sells two products, one with sales of $10,000 and variable expenses of $2,500, another with sales of $46,000 and variable expenses of $15,420. Fixed expenses are $33,100. Breakeven point for the whole company is close to: А. 833,100 В. $22,900 C. $51,020 D. $48,676 A company that reduces the proportion of variable costs in its cost structure will: A. enjoys higher stability in profits. B. increase its profits more when the economy is good. C. have a loss more easily when the economy is bad. D. be indifferent. 5. 6. is normally recorded on any financial statement but irrelevant in decision making which is not. A. Sunk cost B. Incremental cost C. Differential…