Rocks Industries has identified three different activities as cost drivers: machine setups, machine hours, and inspections. The overhead and estimated usage are: Activity Overhead per Activity Annual Usage Machine Set Up $75,000 6,000 Machine Hours $85,002 5,484 Inspections $70,000 20,000 Compute the overhead rate for each activity.
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Q: Compute the overhead rate for each activity
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- The following information for the past year is available from Gas Company, a company that uses machine hours to apply standard factory overhead cost to outputs: Actual total factory overhead cost incurred $ 31,000 Actual fixed overhead cost incurred $ 12,000 Budgeted fixed overhead cost $ 14,000 Actual machine hours 4,000 Standard machine hours allowed for the units manufactured 5,200 Denominator volume—machine hours 4,500 Standard variable overhead rate per machine hour $ 3 The standard fixed overhead application rate, to two (2) decimal places, is: A. $5.11 per machine hourB. $2.11 per machine hourC. $4.11 per machine hourD. $3.11 per machine hourE. $6.11 per machine hourHoneywell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year. Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection $0.22 Cost Driver Orders Setups Machine hours $1.34 $1.86 $0.47 Parts Inspections Estimated Overhead $21,500 $31,100 $46,500 $51,600 $35,400 Cost Driver Activity. 500 orders 450 setups 125,000 hours 1,000,000 parts Overhead is applied using traditional costing based on direct labor hours. What is the overhead application rate? 500 inspections 45One of Waterway Company's activity cost pools is machine setups with estimated overhead of $240000. Waterway produces sparklers (360 setups) and lighters (640 setups). How much of the machine setup cost pool should be assigned to sparklers? O $120000 $153600 O $86400 $240000
- Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has to overhead of $132,720. Carlise has identified the following information about its overhead activity cost pools and the two product lines: Quantity/Amount Consumed by Indoor Line Quantity/Amount Consumed by Outdoor Line Activity Cost Pools Cost Driver Materials handling Number of moves Quality control Number of inspections Machine maintenance Number of machine hours Required: 1. Suppose Carlise used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) Indoor Model Outdoor Model Total Cost Assigned to Pool $21, 120 $71,760 4,600 inspections $39,840 29,000 machine hours 19,000 machine hours 600 moves 500 moves 5,800 inspections Overhead AssignedDawson Company manufactures small table lamps and desk lamps. The following shows the activities per product and the total overhead information: Line Item Description Units Setups Inspections Assembly (dlh) Small table lamps 4,000 3,500 9,450 45,600 Desk lamps 8,100 7,000 15,750 45,600 Activity Total Activity-Base Usage Budgeted Activity Cost Setups 10,500 $95,550 Inspections 25,200 168,840 Assembly (dlh) 79,800 255,360 The total factory overhead to be allocated to desk lamps is a. $315,145 b. $409,689 c. $567,261 d. $189,087Paparo Corporation has provided the following data from its activity-based costing system: Total Cost $1,005,000 Activity Cost Pool Assembly Processing orders Inspection Data concerning the company's product Q79Y appear below: Annual unit production and sales Annual machine-hours Annual number of orders Annual inspection hours Direct materials cost Direct labor cost Multiple Choice $168.52 per unit Total Activity 60,000 machine-hours 2,200 orders $ 83,930 $ 106,960 1,400 inspection-hours According to the activity-based costing system, the average cost of product Q79Y is closest to: $96.25 per unit $131.30 per unit O $151.15 per unit 350 1,100 100 40 $55.00 per unit $41.25 per unit
- Ho Cabinet Company has developed the following overhead cost formulas: Overhead Cost Cost Formula Depreciation $600 Lubrication $150 plus $0.70 per machine hour Utilities $0.50 per machine hour Based on these cost formulas, the total overhead cost expected for Ho Cabinet Company if 1,200 machine hours are worked is:go.2Maxey & Sons manufactures two types of storage cabinets—Type A and Type B—and applies manufacturing overhead to all units at the rate of $120 per machine hour. Production information follows. Type A Type BAnticipated volume (units) 24,000 45,000 Direct-material cost per unit $ 28 $ 42 Direct-labor cost per unit 33 33 The controller, who is studying the use of activity-based costing, has determined that the firm’s overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities’ three respective cost drivers, follow. Type A Type B TotalSetups 140 100 240 Machine hours 48,000 67,500 115,500 Outgoing shipments 200 150 350 The firm’s total…
- Tidwell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year. Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly I Inspection ( Cost Driver $1.20 per direct labor hour. $240 per order. $0.12 per part. $6,834 per order. Orders Setups Machine hours Parts Inspections Est. Overhead $ 120,000 297,000 1,500,000 1,200,000 MA 300,000 Cost Driver Activity W 500 orders 450 setups If overhead is applied using activity-based costing, the overhead application rate for ordering and receiving is 125,000 MH 1,000,000 parts 500 inspections P s 240Angle Max 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 Assume that the Assembly Department allocates overhead using a plantwide overhead rate based on machine hours. How much total overhead will be assigned to a product that requires 2 direct labor hour and 3.30 machine hours in the Assembly Department, and 4.50 direct labor hours and 0.4 machine hours in the Finishing Department? O$17.60. Assembly 180,000 DLH 380,000 MH $380,000 $20.40. Finishing 148,000 DLH 91, 200 MH $562, 400Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce. Additional information follows: Cost Pool Allocation Base Overhead Rate Materials handling Number of parts $.08 Machining Machine hours $7.20 Assembling Number of parts $.35 Packaging Number of finished units $2.70 What is the cost of machining per ceiling fan? Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce. Additional information follows: Cost Pool Allocation Base Overhead Rate Materials handling Number of parts $.08 Machining Machine hours $7.20 Assembling Number of parts $.35 Packaging Number of finished units $2.70 What is the cost of machining per ceiling fan? $144.00 $18.00 $180.00 $30.00
