Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs. Manufacturing overhead Total costs Standard 24,000 14,400 18,000 $ 480,000 288,000 Predetermined overhead rate Enhanced 8,000 9,600 18,000 $ 720,000 612,000 Total 1% of materials cost 32,000 24,000 36,000 Required: Compute the predetermined overhead rate assuming that Redfern Audio uses direct material costs to allocate overhead costs. $ 1,200,000 900,000 864,000 $ 2,964,000

Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs. Manufacturing overhead Total costs Standard 24,000 14,400 18,000 $ 480,000 288,000 Predetermined overhead rate Enhanced 8,000 9,600 18,000 $ 720,000 612,000 Total 1% of materials cost 32,000 24,000 36,000 Required: Compute the predetermined overhead rate assuming that Redfern Audio uses direct material costs to allocate overhead costs. $ 1,200,000 900,000 864,000 $ 2,964,000

Name: Redfern Audio produces audio equipment including headphones. At the C
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Description: Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standardand Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus P

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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Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Standard Enhanced Total Units produced 25,500 8,500 34,000 Machine-hours 15,300 10,200 25,500 Direct labor-hours 19,125 19,125 38,250 Direct materials costs $ 510,000 $ 765,000 $ 1,275,000 Direct labor costs 306,000 650,250 956,250 Manufacturing overhead 841,500 Total costs Compute the predetermined overhead rate assuming that Redfern Audio uses direct labor costs to allocate overhead costs. Note: Round your answer to 2 decimal places. Predetermined overhead rate % of direct labor cost
Solomon Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 78, 300 $ 28,910 $ 15,000 $ 180,000 Cost driver 2,700 labor hours 49 setups Percentage of use 18,000 units Production of 730 sets of cutting shears, one of the company's 20 products, took 180 labor hours and 5 setups and consumed 16 percent of the product - sustaining activities. Required Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? How much overhead is allocated to the cutting shears using activity-based costing? Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 730 units…
Luther Manufacturing uses an activity-based cost system. The company produces Model 0 and Model J. Information relating to the two products is as follows: Model O Model J 48,000 60,000 Units produced Machine hours 15,000 17,000 Direct labor hours 16,000 24,000 Material handling (number of moves) 8,000 12,000 Setups 10,000 14,000 Th+following costs are reported: Material handling $160,000 Labor-related overhead 480,000 Setups 240,000 Labor-related overhead costs assigned to Model O are (E) a. $240,000 C. $217,000 b. $232,000 d. $192,000
Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Standard Premium Units produced Production runs per quarter 11,600 50 2,900 25 Direct materials cost per unit $ 30 50 $ 64 75 Direct labor cost per unit Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material inspection. Data on manufacturing overhead for a representative quarter follow: Supervision Setup labor Incoming inspection Total overhead $ 239,250 278,400 200,100 $ 717,750 Required: a. Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter? b. The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: direct labor cost for supervision, production runs for setup labor, and direct material dollars for incoming…
Adirondack Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. Total DLH per Product Direct Overhead Labor Hours B Painting Dept. $248,400 10,300 Finishing Dept. 65,700 10,000 6 Totals $314,100 20,300 11 12 The single plantwide factory overhead rate for Adirondack Marketing Inc. is Oa. $6.57 per dlh Ob. $15.47 per dlh Oc. $2.09 per dlh Od. $24.12 per dlh
Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead Total costs Standard 29,700 17,820 22,275 $ 594,000 356,400 Predetermined overhead rate Enhanced 9,900 11,880 22,275 $ 891,000 757,350 Total Required: Compute the predetermined overhead rate assuming that Redfern Audio uses direct labor costs to allocate overhead costs. Note: Round your answer to 2 decimal places. % of direct labor cost 39,600 29,700 44,550 $ 1,485,000 1,113,750 730, 620 $ 3,329,370
Drilling Company uses activity-based costing and provides this information: Manufacturing Activity Cost Driver Driver Rate Materials handling Number of parts $ 0.60 Machinery Number of machine hours 51.00 Assembly Number of parts 2.85 Inspection Number of finished units 30.00 Drilling has just completed 80 units of a component for a customer. Each unit required 100 parts and 3 machine hours. The prime cost is $1,300 per finished unit. All other manufacturing costs are classified as manufacturing overhead. Required: 1. Compute the total manufacturing costs and the unit costs of the 80 units just completed using ABC costing. 2. In addition to the manufacturing costs, the firm has determined that the total cost of upstream activities, including research and development and product design, is $180 per unit. The total cost of downstream activities, such as distribution, marketing, and customer service, is $300 per unit. Compute the full product cost per unit, including…
Required information Skip to question [The following information applies to the questions displayed below.] Hickory 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 $729,000 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 $ 231,600 12,000 MHs Machine setups Number of setups $ 55,900 130 setups Product design Number of products $ 77,000 2 products General factory Direct labor-hours $ 364,500 14,400 DLHs Activity Measure Product Y Product Z Machine-hours 6,300 5,700 Number of setups 40 90 Number of products 1 1 Direct labor-hours 9,000 5,400…
Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. Direct Product Overhead Labor Hours (dlh) A B Painting Dept. $243,300 11,500 dlh 14 dlh 7 dlh Finishing Dept. 71,600 6,600 18 Totals $314,900 18,100 dlh 17 dlh 25 dlh The factory overhead allocated per unit of Product B in the Painting Department if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is Oa. S148.12 per unit Ob. S21.16 per unit Oc. S75.94 per unit Od. $121.78 per unit
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Franklin Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Cost Cost driver Req A and B Unit Level $ 62,400 2,400 labor hours Req C Allocated overhead Direct cost Total cost per unit Desired profit Sales price Production of 710 sets of cutting shears, one of the company's 20 products, took 170 labor hours and 6 setups and consumed 15 percent of the product-sustaining activities. Complete this question by entering your answers in the tabs below. Required a. Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using…
Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead Total costs Standard 24,000 14,400 18,000 $530,400 330,000 Product costs per unit Standard Enhanced 8,000 9,600 18,000 $ 795,600 675,000 Required: a. Compute the individual product costs per unit assuming that Redfern Audio uses direct labor costs to allocate overhead to the products. b. Compute the individual product costs per unit assuming that Redfern Audio uses material costs to allocate overhead to the products. Enhanced Total Required A Required B Compute the individual product costs per unit assuming that Redfern Audio uses direct labor costs to allocate overhead to the products. Note: Do…