Ryan Corporation manufactures auto steering systems. Prime cost and machine time estimates for one unit of the product for the year follow: Direct materials Direct labor ($19/hour) Machine hours This product requires 15 hours of direct labor in Department A and 10 hours in Department B. Also, it requires 5 machine hours in Department A and 15 machine hours in Department B. Using output as the activity, the factory overhead costs estimated in these two departments follow: $ 270 $ 475 20 A B $ 255,000 $ 150,000 101,000 170,000 Management expects the firm to produce 1,000 units during the year. Variable cost Fixed cost Required: 1. Assume the total actual overhead base used was equal to the estimated base for the 1,000 units produced. Assume that factory overhead was applied on the basis of direct labor hours. Compute the predetermined plantwide factory overhead rate. 2. If factory overhead were applied on the basis of machine hours, what would be the plantwide overhead rate? 3. If the company produced 1,000 units during the year, what was the total amount of applied factory overhead in each department in requirements 1 and 2? nent A sing direct labor hours as 5. Comp the departmental overhea rate and amount of applied overhead for De allocation base and for Department B using machine hours as the allocation base. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 5 If the company produced 1,000 units during the year, what was the total amount of applied factory overhead in each department in requirements 1 and 2? (Round "Predetermined Overhead Rate" answer to 2 decimal places.) Applied factory overhead using direct labor hours Applied factory overhead using machine hours Department A $ 255,000 $ 150,000 $ 101,000 170,000 $ < Required 2 Department B Required 5 Total $320,000 $319,950 X >
Ryan Corporation manufactures auto steering systems. Prime cost and machine time estimates for one unit of the product for the year follow: Direct materials Direct labor ($19/hour) Machine hours This product requires 15 hours of direct labor in Department A and 10 hours in Department B. Also, it requires 5 machine hours in Department A and 15 machine hours in Department B. Using output as the activity, the factory overhead costs estimated in these two departments follow: $ 270 $ 475 20 A B $ 255,000 $ 150,000 101,000 170,000 Management expects the firm to produce 1,000 units during the year. Variable cost Fixed cost Required: 1. Assume the total actual overhead base used was equal to the estimated base for the 1,000 units produced. Assume that factory overhead was applied on the basis of direct labor hours. Compute the predetermined plantwide factory overhead rate. 2. If factory overhead were applied on the basis of machine hours, what would be the plantwide overhead rate? 3. If the company produced 1,000 units during the year, what was the total amount of applied factory overhead in each department in requirements 1 and 2? nent A sing direct labor hours as 5. Comp the departmental overhea rate and amount of applied overhead for De allocation base and for Department B using machine hours as the allocation base. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 5 If the company produced 1,000 units during the year, what was the total amount of applied factory overhead in each department in requirements 1 and 2? (Round "Predetermined Overhead Rate" answer to 2 decimal places.) Applied factory overhead using direct labor hours Applied factory overhead using machine hours Department A $ 255,000 $ 150,000 $ 101,000 170,000 $ < Required 2 Department B Required 5 Total $320,000 $319,950 X >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ryan Corporation manufactures auto steering systems. Prime cost and machine time estimates for one unit of the product for the year
follow:
Direct materials
Direct labor ($19/hour)
Machine hours
This product requires 15 hours of direct labor in Department A and 10 hours in Department B. Also, it requires 5 machine hours in
Department A and 15 machine hours in Department B. Using output as the activity, the factory overhead costs estimated in these two
departments follow:
A
$ 255,000 $ 150,000
101,000 170,000
Management expects the firm to produce 1,000 units during the year.
Variable cost
Fixed cost
$ 270
$ 475
20
Required:
1. Assume the total actual overhead base used was equal to the estimated base for the 1,000 units produced. Assume that factory
overhead was applied on the basis of direct labor hours. Compute the predetermined plantwide factory overhead rate.
2. If factory overhead were applied on the basis of machine hours, what would be the plantwide overhead rate?
3. If the company produced 1,000 units during the year, what was the total amount of applied factory overhead in each department in
requirements 1 and 2?
5. Compute the departmental overhead rate and amount of applied overhead for Department A using direct labor hours as the
allocation base and for Department B using machine hours as the allocation base.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2 Required 3 Required 5
If the company produced 1,000 units during the year, what was the total amount of applied factory overhead in each
department in requirements 1 and 2? (Round "Predetermined Overhead Rate" answer to 2 decimal places.)
Applied factory overhead using direct labor hours
Applied factory overhead using machine hours
Department
A
$ 255,000
$ 101,000
< Required 2
Department
B
$ 150,000
$ 170,000
Required 5
Total
$ 320,000 X
$319,950
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