Quality Furniture uses departmental overhead rates (rather than a plantwide overhead rate) to allocate its manufacturing overhead to jobs. The company's two production departments have the following departmental overhead rates: attached in ss belowhanks Quality Furniture uses departmental overhead rates (rather than a plantwide overhead rate) to allocateits manufacturing overhead to jobs. The company's two production departments have the followingdepartmental overhead rates:(Click the icon to view the overhead rates.)C=Job 242 used the following direct labor hours and machine hours in the twomanufacturing departments:(Click the icon to view the resources used for Job 242.)Read the requirements1. How much manufacturing overhead should be allocated to Job 242?Calculate the total manufacturing overhead for the job by using a formula for each department's overhead amount and then adding both amounts together. First determine the formula and overhead for theCutting Department.Cutting Department overhead ←Quality Furniture uses departmental overhead rates (rather than a plantwide overhead rate) to allocateits manufacturing overhead to jobs. The company's two production departments have the followingdepartmental overhead rates:(Click the icon to view the overhead rates.)Data tableCutting Department:$10 per machine hourFinishing Department: $18 per direct labor hourPrintDone- XData tableJOB 242Direct Labor Hours......Machine Hours .........PrintJob 242 used the following direct labor hours and machine hours in the twomanufacturing departments:(Click the icon to view the resources used for Job 242.)Read the requirements.- XFinishingCuttingDepartment Department3781DoneRequirements1. How much manufacturing overhead should be allocated to Job 242?2. Assume that direct labor is paid at a rate of $26 per hour and Job 242 used$2,350 of direct materials. What was the total manufacturing cost of Job 242?PrintDone

Activity rate is used to allocate overhead to respective production. Activity based costing use…

← Quality Furniture uses departmental overhead rates (rather than a plantwide overhead rate) to allocate its manufacturing overhead to jobs. The company's two production departments have the following departmental overhead rates: (Click the icon to view the overhead rates.) Data table Cutting Department: $10 per machine hour Finishing Department: $18 per direct labor hour Print Done - X Data table JOB 242 Direct Labor Hours...... Machine Hours ......... Print Job 242 used the following direct labor hours and machine hours in the two manufacturing departments: (Click the icon to view the resources used for Job 242.) Read the requirements. - X Finishing Cutting Department Department 3 7 8 1 Done Requirements 1. How much manufacturing overhead should be allocated to Job 242? 2. Assume that direct labor is paid at a rate of $26 per hour and Job 242 used $2,350 of direct materials. What was the total manufacturing cost of Job 242? Print Done

← Quality Furniture uses departmental overhead rates (rather than a plantwide overhead rate) to allocate its manufacturing overhead to jobs. The company's two production departments have the following departmental overhead rates: (Click the icon to view the overhead rates.) Data table Cutting Department: $10 per machine hour Finishing Department: $18 per direct labor hour Print Done - X Data table JOB 242 Direct Labor Hours...... Machine Hours ......... Print Job 242 used the following direct labor hours and machine hours in the two manufacturing departments: (Click the icon to view the resources used for Job 242.) Read the requirements. - X Finishing Cutting Department Department 3 7 8 1 Done Requirements 1. How much manufacturing overhead should be allocated to Job 242? 2. Assume that direct labor is paid at a rate of $26 per hour and Job 242 used $2,350 of direct materials. What was the total manufacturing cost of Job 242? Print Done

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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Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools--Processing, Supervising, and Other. The costs in those activity cost pools appear below: Processing Supervising Other Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the other activity cost pool are not assigned to products. Activity data appear below: Product MO Product M5 Total $ 3,800 $ 23,800 $ 10,400 MHs (Processing) 9,700 300 10,000 Sales (total) Direct materials (total) Direct labor (total) Batches (Supervising) 500 500 1,000 Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. Product Mº $ 74,100 $ 28,500 $ 27,800 Product M5 $ 89,900 $ 31,400 $ 41,700
The following is taken from Clausen Company's internal records of its factory with two operating departments. The cost driver for indirect labor is direct labor hours, and the cost driver for the remaining items is number of hours of machine use. Compute the total amount of rent and utilities allocated to Dept. 2 using activity-based costing. Direct LaborHours MachineHours Operating Dept. 1 864 9,300 Operating Dept. 2 2,016 6,200 Totals 2,880 15,500 Factory overhead costs Rent and utilities $ 20,700 Indirect labor 16,300 Depreciation – Equipment 13,000 Total factory overhead $ 50,000
Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion The management of Nova Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production department factory overhead rate method. The following factory overhead was budgeted for Nova: $765,000 315,000 $1,080,000 Fabrication Department factory overhead Assembly Department factory overhead Total Direct labor hours were estimated as follows: Fabrication Department Assembly Department Total In addition, the direct labor hours (dlh) used to produce a unit of each product in each department were determined from engineering records, as follows: Production Departments…
Asap Which of the following is not a factory overhead allocation method? a.activity-based costingb.factory costingc.single plantwide rated.multiple production department rates
Assigning indirect costs to departments is completed by ________. applying the predetermined overhead rate debiting the manufacturing costs incurred applying the costs to manufacturing overhead applying the costs to work in process inventory In a process costing system, which account shows the overhead assigned to the department? cost of goods sold • finished goods inventory raw material inventory work in process inventory A print shop produces custom paintings. It has received four different orders (a/B/C/D) The total cost for the four orders is labor $6000, materials $10,000 and overheads for 5,000. What processes/systems would you implement if you wanted to know the cost for each of the orders which are not similar.
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Why would a manufactury company with multiple production department still prefrer to use a single plantwide overhead rate
McDuff Company uses a job-order costing system to compute product costs. There are two producing departments (P1 and P2) and two support departments (S1 and S2). The costs incurred in S1 and S2 are allocated to Departments A and B and included in their factory overhead rates for costing products. S1 costs are allocated based on the number of employees, S2 costs are allocated based on direct labor hours, and the production departmental overhead rates are also based on direct labor hours. The following data are available for a recent period: S1 S2 P1 P2 Direct department costs $12,000 $18,000 $70,000 $117,500 Number of employees 8 12 48 72 Direct labor hours 450 325 2,250 1,800 Required: Prepare a schedule allocating the support department costs to the producing departments using the sequential allocation method. The department with the greatest percentage of interdepartmental services should be allocated first.…
Assuming the use of normal costing, determine the predetermined overhead rates used in the Machining Department and the Assembly Department.
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