Required:1. Should Irrigation Specialties use process costing or job-order costing?Process costing2. If Irrigation Specialties uses an actual costing system, what is the cost of a single system installed in June? In July? In August? Round your answersto the nearest dollar.June682 per systemJuly654 per systemAugust621 per system3. Now assume that Irrigation Specialties uses a normal costing system. Estimated overhead for the year is $54,000, and estimated production is 600watering systems. What is the predetermined overhead rate per system?90 per system installedWhat is the cost of a single system installed in June? In July? In August?590 per systemJuneJuly590 per systemAugust $590 per system Vince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state.Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year:Number of direct labor hours6,720Direct labor cost$67,200Overhead cost$50,400During the year, the following actual amounts were experienced:Number of direct labor hours6,045Direct labor incurred$66,495Overhead incurred$50,500Vince Melders, owner of EcoScape, noticed that the watering systems for many houses in a local subdivision had the same layout and required virtuallyidentical amounts of prime cost. Vince met with the subdivision builders and offered to install a basic watering system in each house. The idea wasaccepted enthusiastically, so Vince created a new company, Irigation Specialties, to handle the subdivision business. In its first three months inbusiness, Irrigation Specialties experienced the following:JuneJulyAugustNumber of systems installed6080120Direct materials used$18,000$24,000$36,000Direct labor incurred$12,000$16,000$24,000Overhead$10,900$12,340$14,500

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

Required: 1. Should Irrigation Specialties use process costing or job-order costing? Process costing 2. If Irrigation Specialties uses an actual costing system, what is the cost of a single system installed in June? In July? In August? Round your answers to the nearest dollar. 682 per system June July 654 per system August $ 621 per system 3. Now assume that Irrigation Specialties uses a normal costing system. Estimated overhead for the year is $54,000, and estimated production is 600 watering systems. What is the predetermined overhead rate per system? 90 per system installed What is the cost of a single system installed in June? In July? In August? 590 per system June July 590 per system August $ 590 per system

Required: 1. Should Irrigation Specialties use process costing or job-order costing? Process costing 2. If Irrigation Specialties uses an actual costing system, what is the cost of a single system installed in June? In July? In August? Round your answers to the nearest dollar. 682 per system June July 654 per system August $ 621 per system 3. Now assume that Irrigation Specialties uses a normal costing system. Estimated overhead for the year is $54,000, and estimated production is 600 watering systems. What is the predetermined overhead rate per system? 90 per system installed What is the cost of a single system installed in June? In July? In August? 590 per system June July 590 per system August $ 590 per system

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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⦁ Use ABC to compute overhead cost assigned to an order.KCC Production Corporation uses an activity-based costing system and provided the following budget data: The distribution of resource consumption across activities is as follows: During the year, KCC completed one order from a new customer for 1,000 units, and the related data are as follows: direct labor hours= 0.5 /unit direct materials= $2.00/unit direct labor= $5.00/hour machine hour =1 machine hour per unit Requirements1. Compute the activity rates for each of the activity cost pools.2. Compute the overhead cost assigned to the order from the new customer.
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?
A company allocates $7.50 of overhead per direct labor hour to products. The company uses a plantwide overhead rate with direct labor hours as the allocation base. Given the amounts below, how many direct labor hours does the company expect in department 2? Budgeted: Department 1 Department 2 Manufacturing overhead costs $ 74,358 $ 49,572 Direct labor hours 6,610 DLH ? DLH Machine hours 700 MH 800 MH
A manufacturer uses activity-based costing to assign overhead cost to products. Budgeted cost information for its activities follows. Budgeted Cost $ 210,600 Activity Cost Driver Purchase orders Square feet Budgeted Activity Usage 5,400 purchase orders 5,900 square feet 50 Setups Factory services 104,250 Setup 67,750 Setups Compute an activity rate for each activity. (Round your answers to 2 decimal places.) Activity Purchasing Activity Purchasing Factory services Setup Budgeted Cost 210,600 104,250 67,750 $ $ $ Budgeted Activity Usage Activity Rate
The managerial accountant at Sunny Manufacturing needs to determine how many costs are fixed costs and how many costs are variable costs in the organization. The managerial accountant reported the following information: Sunny Manufacturing Cost Report January – June 20XX Month Machine-Hours Total Costs January 1,800 $21,500 February 2,900 $23,200 March 1,000 $19,750 April 2,400 $21,000 May 3,400 $23,900
Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Expected Cost Activity Driver Activity Capacity Number of setups Number of orders Machine hours Activity Setting up equipment $491,050 Ordering costs 336,600 Machine costs 898,800 Receiving 362,600 Receiving hours Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B $843,000 $455,000 8,200 1,600 Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders Machine hours $563,000 $459,000 15,600 6,800 360 6,900 23,900 3,200 The company's normal activity is 8,400 direct labor hours. Receiving hours 250 12,900 18,900 6,600 610 19,800 42,800 9,800
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Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment Number of setups Ordering costs Number of orders Machine costs Receiving Direct materials Direct labor Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Units completed Direct labor hours Number of setups Number of orders $627,000 481,000 16,200 6,400 370 5,800 24,900 3,700 The company's normal activity is 7,900 direct labor hours. Machine hours Receiving hours Required: Model A Model B $482,510 372,000 864,000 410,000 Receiving hours Model A Machine hours $ del B Model B Unit Cost $836,000 497,000 8,500 1,500 240 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. 12,800 18,300 6,300 610 18,600 43,200 10,000 2. Determine the unit cost for…
an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Actual Cost in March Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,600 + $0.21 per machine-hour $38,300 + $1.50 per machine-hour $0.40 per machine-hour $94,800 + $1.50 per machine-hour $68,200 $ 23,440 $ 68,100 $ 9,400 $ 131,700 $ 69,900 During March, the company worked 22,000 machine-hours and produced 16,000 units. The company had originally planned to work 24,000 machine-hours during March. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a report showing the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e.,…