Req. 1: Before the year began, Custom Fabric Ventures estimated the following costs for the year: See Excel file: Estimated Annual Costs First, fill in the missing costs. Then, calculate the company's predetermined manufacturing overhead rate, assuming the company uses direct labor hours as its allocation base:

Req. 1: Before the year began, Custom Fabric Ventures estimated the following costs for the year: See Excel file: Estimated Annual Costs First, fill in the missing costs. Then, calculate the company's predetermined manufacturing overhead rate, assuming the company uses direct labor hours as its allocation base:

Name: Type of Cost12 Selling and Administrative salaries and expenses3Direc
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Type of Cost12 Selling and Administrative salaries and expenses3Direct Labor (Estimated 40,000 DL hours @ average wage rate of $12 per hour)4 Indirect plant labor5 Plant utilities6 Purchases of direct materials7 Lease and property taxes on the plant

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Al-Bustan Co. gathered the following information on total costs and factory machine usage for the…

A: Formula: Variable cost = Total difference of total cost / Total difference of machine hours

Q: The following data pertain to the Oneida Restaurant Supply Company for the year just ended. Budgeted…

A: Overhead: It represents the indirect costs incurred in production, such as utilities and rent, which…

Q: Kingsport Containers Company makes a single product with wide seasonal variations in demand. The…

A: Overheads: Indirect costs incurred while producing goods or services. Overhead costs cannot be…

Q: The following information is available regarding the total manufacturing overhead of Bursa Mfg. Co.…

A: The question is based on the concept of Cost Accounting.

Q: At the beginning of the year, Custom Mfg. established its predetermined overhead rate by using the…

A: Manufacturing overhead is the cost incurred on the production of the goods.

Q: The allocation base of the company is machine-hours and the estimated amount of the allocation base…

A: Predetermined Overhead Rate :— It is the rate used to apply manufacturing overhead to cost objects…

Q: Required: 1. Should Irrigation Specialties use process costing or job-order costing? Process costing…

A: The process costing consists similar kind of products but job costing involves different jobs…

Q: Kingsport Containers Company makes a single product with wide seasonal variations in demand. The…

A: Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Q: RALPH Inc. has three producing departments (R, A, and L) and two service departments (P and H).…

A: using algebraic method allocation is to be done on the basis of direct labour hours , since service…

Q: Epsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage…

A: Predetermined Manufacturing Overhead Rate = Estimated total manufacturing overhead costs / Estimated…

Q: Using the pre-determined overhead rate calculated above, calculate the overhead that would be…

A: >Predetermined Overhead rate is calculated at the beginning of the period to allocate the…

Q: During the coming accounting year, Ester Manufacturing, Inc., anticipates the following costs,…

A: The expected cost of manufacturing overhead is applied to cost objects for a particular reporting…

Q: Use the following information from BSJ Industries to determine the predetermined overhead rate based…

A: The predetermined overhead rate is calculated as Estimated overhead cost divided by Estimated base…

Q: Vakos Manufacturers uses the traditional approach in allocating manufacturing overheads bo hours.…

A: Lets understand the basics. For calculating applied manufacturing overhead, we need to use below…

Q: Epsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage…

A: The following calculations are done in the records of Epsilon manufacturing Company which uses an…

Q: KC Enterprises estimated the company will incur $96,380 in overhead costs and will use 5,090 direct…

A: predetermined overhead rate is ratio of allocation of overhead cost on direct labor hour. It helps…

Q: Hamilton Company applies manufacturing overhead costs to products based on direct labor hours. The…

A: Predetermined overhead rate = Estimated overhead cost / Estimated direct labor hours Predetermined…

Q: 1. Compute the actual and budgeted manufacturing overhead rates for 2020 2. During March, the…

A: Compute the actual and budgeted manufacturing overhead rates for 2017:Therefore, the actual…

Q: Harrison Company makes two products and uses a traditional costing system in which a single…

A: Manufactuing overhead may be allocated using traditional costing or activity-based costing.…

Q: Kingsport Containers Company makes a single product with wide seasonal variations in demand. The…

A: Variable cost Depends upon the production of goods or services that is increment of sales increases…

Q: Eli Lilly Corporation has their headquarters in Indiana. Lilly uses a predetermined overhead rate…

A: PREDETERMINED OVERHEAD RATEPredetermined rate means an indirect cost rate.Predetermined overhead…

Q: Lehighton Chalk Company manufactures sidewalk chalk, which it sells online by the box at $25 per…

A: A managerial accounting technique for recording all costs related to the production of a specific…

Q: a. Calculate the total manufacturing costs and the cost per unit produced and "Cost per unit" to 2…

A: Activity-based costing: Activity-based costing (ABC): It is a method of distribution of overheads…

Q: Cost Behavior SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity…

A: Since we answer up to 3 sub-parts, we'll answer the first 3. Please resubmit the question and…

Q: The following data on materials purchased and issued during the month of June were shown: the cost…

A: 1) In case of FIFO, the issuance of material is considered from the material purchased earlier.…

Q: XYZ industries applies overhead based on direct labor cost. The following information was available…

A: Over or under applied manufacturing cost- It is the difference between the actual cost incurred to…

Q: Superior Company provided the following data for the year ended December 31 (all raw materials are…

A: The cost of goods manufactured is the sum of all manufacturing costs for products produced within a…

Q: The allocation base of the company is machine-hours and the estimated amount of the allocation base…

A: Lets understand the basics. Management calculates predetermine overhead rate in order to allocate…

Q: Epsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on a…

A: Formulas: Predetermined Manufacturing Overhead Rate = Estimated total manufacturing overhead…

Q: Angler Industries produces a product which goes through two operations, Assembly and Finishing,…

A: Plantwide Overhead Rate:- It is the rate used to allocate manufacturing overhead costs to cost…

Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

Topic Video

Question

Type of Cost
1
2 Selling and Administrative salaries and expenses
3
Direct Labor (Estimated 40,000 DL hours @ average wage rate of $12 per hour)
4 Indirect plant labor
5 Plant utilities
6 Purchases of direct materials
7 Lease and property taxes on the plant
8 Marketing expenses
Depreciation on production equipment (equipment originally costing $700,000 three year ago is
being depreciated over a 5 year useful life using straight-line depreciation. No salvage value is
9 expected.)
10 Indirect materials to be used in the plant
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Estimated total cost
for the year
S
210 000
$
$
S
$
$
$
$
40 000
50 000
1 400 000
120 000
30 000
20 000
24・・ 23・・ 22・・ 21 20
Req. 1: Before the year began, Custom Fabric Ventures estimated the following costs for the year:
See Excel file: Estimated Annual Costs
First, fill in the missing costs. Then, calculate the company's predetermined manufacturing overhead
rate, assuming the company uses direct labor hours as its allocation base:
Req. 2: To realize maximum efficiency and meet management's desired level of stock, how many
Black & White handbags should be produced in Job 114?__
Req. 3: The production engineers have given you the materials requirements for each Black & White
handbag. Assume that no efficiencies in materials can be achieved by producing more than one unit per
batch. Complete the Bill of Materials for Job # 114 found below. Be sure to include number of units
being produced in the Job as well as the total quantity needed of each direct material.
See Excel file: Bill of Materials

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Predetermined Overhead Rate

VIEW

Step 2: Calculation

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Selected cost data for Aerial Co for the year are as follows: Estimated overhead cost for the year Estimated direct labor cost for the year Actual manufacturing overhead cost for the year Actual direct labor cost for the year Aerial Co uses direct labor to apply overhead to jobs. What is the over or under applied overhead for this year? Do not round the predetermined rate -- only round the last computation. Enter over applied as a positive amount and under applied as a negative amount. Round to the nearest whole number, omit commas and dollar signs. Your Answer: $ 150,000 $ 81,000 $ 164,000 $ 76,000 1 Answer
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?
Angler Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next year's expected costs and activities are shown below. Direct labor hours Machine hours Overhead costs Multiple Choice O $15.60. O Assume that the Assembly Department allocates overhead based on machine hours, and the Finishing Department allocates overhead based on direct labor hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 3.4 machine hours in the Assembly Department, and 4.0 direct labor hours and 0.6 machine hours in the Finishing Department? $3.40 Assembly 190,000 DLH 390,000 MH $16.10. $ 390,000 Finishing) 149,000 DLH: 95,550 MH $ 581,100
Mason Company provided the following data for this year: Sales Direct labor cost Raw material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead costs Inventories Beginning Ending $ Raw materials $ 8,100 10,900 Work in $ $ 5,100 process Finished goods 20,400 $ $ 70,000 25, 200 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. 2. Prepare a schedule of cost of goods sold. Assume the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. 3. Prepare an income statement. Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. Mason Company Schedule of Cost of Goods Manufactured Direct materials: Total raw materials available $ 652,000 $ 88,000 $…
At the beginning of the year, Custom Manufacturing set its predetermined overhead rate using the following estimates: overhead costs, $520,000, and direct materials costs, $200,000.At year-end, the company reports that actual overhead costs for the year are $528,700 and actual direct materials costs for the year are $200,000. 1. Determine the predetermined overhead rate using estimated direct materials costs 2. Enter the actual overhead costs incurred and the amount of overhead cost applied to jobs during the year using the predetermined overhead rate. Determine whether overhead is over- or underapplied (and the amount) for the year. 3. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Enter the actual overhead costs incurred and the amount of overhead cost applied to jobs during the year using the predetermined overhead rate. Determine whether overhead…
XYZ industries applies overhead based on direct labor cost. The follawing information was available for the last year: Actual manufacturing overhead OMR50,000; Underapplied manufacturing overhead OMR10,400; Actual Prime cost OMR52,000; Actual Direct material cost OMR19,000; Estimated direct labor cost OMR29,000. What was the estimated manufacturing overhead for the year? Select one: a None of the answers given b. OMR39,600 C OMR34,800 d OMRI9,600 e OMR37.200
Heidelberg Fabrication manufactures two products, G-09 and G-35: Units produced Direct materials cost per unit Machine-hours per unit Production runs per quarter G-09 19,400 $7 4 144 Machine depreciation Setup labor Materials handling Total Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow: G-35 3,880 $ 19 7 72 $184,760 52,380 41,904 $ 199,044 Required: a. Heidelberg currently applies overhead on the basis of machine-hours. What is the predetermined overhead rate for the quarter? Note: Round your answer to 2 decimal places. b. Heidelberg is thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: machine-hours for machine depreciation, production runs for setup labor, and direct material dollars for materials handling. Compute the cost driver rates for the proposed system at Heidelberg.
Sunland Co. gathered the following information on power costs and factory machine usage for the last six months: Power Cost Factory Machine Hours $28,390 15,800 36,069 21,400 32,895 18,700 ITT 26,235 15,100 23,890 13,500 20,700 Month January February March April May June Using the high-low method of analyzing costs, answer the following questions and show computations to support your answers. (a) Your answer is correct. What is the estimated variable portion of power costs per factory machine hour? (Round answer to 2 decimal places, e.g. 15.25.) Variable power costs $ (b) eTextbook and Media * Your answer is incorrect. 10.500 Fixed power costs What is the estimated fixed power cost each month? High 1.41 per factory machine hour 20,683 $ Low Attempts: 1 of 5 used
Epsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2018, they estimated total manufacturing overhead costs at sı,015,000, and they estimated total direct labor costs at $1,400,000. The administration and selling overheads are to be absorbed in each job cost at 15% of production cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The company wishes to quote for job # W500. Data for the job are as follows: Direct materials cost $169.450 Direct labour cost $230,000 Direct labour hours 400 hours Special Design Cost Distribution quote from haulage company Units of product produced $12,300 $17,930 250 crates a) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for 2018. b) How much manufacturing overhead was allocated to Job #W500? c) Calculate the total cost & quotation price of Job #W500, given that a margin of 25% is…
A company manufacturing two products furnishers the following data for a year: Product Annual Total Total number Total Output (units) of purchase orders machine number of hours set ups A 750 1200 85 15 B 450 800 115 10 1200 2000 200 25 The annual overheads are as under: Volume related activity costs RO 55000 Set up related costs RO 120000 Purchase related costs RO 85000 Total RO 260000 You are required to calculate the cost per unit of each product A and B based on: a. Traditional method of charging overheads b. Activity based costing method
Coop's Stoops estimated its annual overhead to be $72,000 and based its predetermined overhead rate on 24,000 direct labor hours. At the end of the year, actual overhead was $77,190 and the total direct labor hours were 23,830. What is the entry to dispose of the overapplied or underapplied overhead? If an amount box does not require an entry, leave it blank. Cost of Goods Sold ✓✓ Manufacturing Overhead X ✓ ✓ X
A company manufactures a product with three models, each with different direct material costs and labour hour required and monthly production volume as follows: Labor rate is $10 per hour. The total manufacturing overhead is estimated to be $103,000 per month. Required: a) The manufacturing overhead is allocated to the three models based on labor hour. Compute the pre-determined overhead rate and the unit product cost of Model A. b) The company is considering to use the activity-based costing and gathers the following data related to the cost and activities: Model A Model B Model C Units of production 1,700 1,200 1,100 Labour hour required 0.3 0.6 0.7 Direct material costs 30 40 50 Expected Activity Activity Cost Pool Overhead Costs Model A Model B Model C Activity 1 $30,000 1,000 600 400…