Ridge Marketing Tnc. two products, Presentiy, the company uses single plantwide factory overnead to products. However, management 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. $236,000 11,900 dlh 13 dlh 2 dlh Finishing Dept. 72,200 7,500 5 15 Totals $308,200 19,400 dlh 18 dlh 17 dlh Determine the overhead in the Painting Department for each unit of Product B if Blue Ridge Marketing Inc. uses a multiple department rate system. a. $19.25 per unit O b. $19.83 per unit c. $31.77 per unit d. $39.66 per unit

Ridge Marketing Tnc. two products, Presentiy, the company uses single plantwide factory overnead to products. However, management 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. $236,000 11,900 dlh 13 dlh 2 dlh Finishing Dept. 72,200 7,500 5 15 Totals $308,200 19,400 dlh 18 dlh 17 dlh Determine the overhead in the Painting Department for each unit of Product B if Blue Ridge Marketing Inc. uses a multiple department rate system. a. $19.25 per unit O b. $19.83 per unit c. $31.77 per unit d. $39.66 per unit

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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Activity Cost Pool Labor-related Purchase orders Parts management Board etching General factory Required: Activity Measure Direct labor-hours Number of orders Number of part types Number of boards Machine-hours LAPELLEu Overhead Cost $ 311,500 $ 8,840 $ 71,280 $ 63,700 $ 148,000 Expected Activity 44,500 DLHS 221 orders 99 part types 1,820 boards 14,800 MHs 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company's four products as follows: Expected Activity Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHS) Product A Product B Product C Product D 6,800 51 27,300 29 4,600 49 5,800 92 34 17 33 15 500 2,100 770 6,300 550 0 2,400 4,000 Using the ABC data, determine the total amount of overhead cost assigned to each product. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the…
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2. Traditional Costing vs. ABC CPA Company incurs P 800,000 in manufacturing overhead costs. The company has been allocating overhead to individual product lines based on direct labor hours. Cost Driver Direct labor hours Number of batches Amount in Cost Pool P 300,000 300,000 200,000 Number of shipments Total overhead costs P 800,000 Two products have the following characteristics: Direct labor hours Number of batches Number of shipments Product X 2,000 24 2 Amount of Activity 40,000 1,000 500 Product Y 1,000 30 150 REQUIRED: Determine the overhead costs to be allocated to each product (X and Y) using: A) Traditional costing (based on direct labor hours) B) Activity-based costing (ABC)
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< overhead and direct labor hours. Painting Dept. Finishing Dept. Totals ring moving to a multiple department rate system for allocating overhead. The Direct Overhead Labor Hours (dlh) Product A $241,200 83,700 $324,900 10,800 dlh 10,100 20,900 dlh 7 dlh 3 10 dlh Product B 11 dlh 7 18 dlh Using a single plantwide rate, the factory overhead allocated per unit of Product B is Oa. $15.55 O b. $279.90 Oc. $155.50 O d. $156.33
Required information Greenwood Company manufactures two products-15,000 units of Product Y and 7,000 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 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: Expected Activity 11, 000 MHS 270 setups Estimated Overhead Cost Activity Cost Pool Activity Measure 227, 700 153, 900 Machine-hours Number of setups Number of products Direct labor- %$4 Machining Machine setups Production design 91,000 2 products General factory 257,000 10, 000 DLHS hours Activity Measure Machining Number of setups Number of products Direct labor-hours Product Y 8, 700 60 Product Z 2, 300 210 1 8,700 1,300 11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your…
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Question 2 Lano Limited has decided to move from a factory-wide to a departmental overhead allocation policy with the overhead allocation base to be the dominant activity in that department. It has three departments, Prep, Casting and Finishing. You are given the following information: Expected Overheads Machine hours Labour Hours Prep 1,200,000 6,000 6785 Casting 560,000 5,690 3,000 Finishing 890,000 4,000 8,000 Based on this information, what will the overhead allocation rate for the Prep department be? Round your answer to the nearest whole number.