S3-6 Compute various manufacturing Edmonton Pools manufactures swimming pool equipment. Edmonton estimates total manufacturing overhead costs next year to be $1,400,000. Edmonton also estimates it will use 50,000 direct labor hours and incur $1,000,000 of direct labor cost next year. In addition, the machines are expected to be run for 40,000 hours. Compute the prede- termined manufacturing overhead rate for next year under the following independent situations: 1. Assume that the company uses direct labor hours as its manufacturing overhead allocation base. 2. Assume that the company uses direct labor cost as its manufacturing overhead allocation base. 3. Assume that the company uses machine hours as its manufacturing overhead allocation base. 3-7 Continuation of S3-6: compute total allocated overhead (Learning Objective 3) Use your answers from S3-6 to determine the total manufacturing overhead allocated Edmonton's manufacturing jobs in the following independent situations: 1. Assume that the company actually used 51,700 direct labor hours. 2. Assume that the company actually incurred $1,020,000 of direct labor cost. 3. Assume that the company actually ran the machines 39,500 hours. 4. Briefly explain what you have learned about the total manufacturing overhead allc cated to production. e er
S3-6 Compute various manufacturing Edmonton Pools manufactures swimming pool equipment. Edmonton estimates total manufacturing overhead costs next year to be $1,400,000. Edmonton also estimates it will use 50,000 direct labor hours and incur $1,000,000 of direct labor cost next year. In addition, the machines are expected to be run for 40,000 hours. Compute the prede- termined manufacturing overhead rate for next year under the following independent situations: 1. Assume that the company uses direct labor hours as its manufacturing overhead allocation base. 2. Assume that the company uses direct labor cost as its manufacturing overhead allocation base. 3. Assume that the company uses machine hours as its manufacturing overhead allocation base. 3-7 Continuation of S3-6: compute total allocated overhead (Learning Objective 3) Use your answers from S3-6 to determine the total manufacturing overhead allocated Edmonton's manufacturing jobs in the following independent situations: 1. Assume that the company actually used 51,700 direct labor hours. 2. Assume that the company actually incurred $1,020,000 of direct labor cost. 3. Assume that the company actually ran the machines 39,500 hours. 4. Briefly explain what you have learned about the total manufacturing overhead allc cated to production. e er
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please answer numer 4 under S3-7.
Transcribed Image Text:S3-6 Compute various manufacturing
Edmonton Pools manufactures swimming pool equipment. Edmonton estimates total
manufacturing overhead costs next year to be $1,400,000. Edmonton also estimates it
will use 50,000 direct labor hours and incur $1,000,000 of direct labor cost next year. In
addition, the machines are expected to be run for 40,000 hours. Compute the prede-
termined manufacturing overhead rate for next year under the following independent
situations:
1. Assume that the company uses direct labor hours as its manufacturing overhead
allocation base.
2. Assume that the company uses direct labor cost as its manufacturing overhead
allocation base.
3. Assume that the company uses machine hours as its manufacturing overhead
allocation base.
3-7 Continuation of S3-6: compute total allocated overhead (Learning
Objective 3)
Use your answers from S3-6 to determine the total manufacturing overhead allocated
Edmonton's manufacturing jobs in the following independent situations:
1. Assume that the company actually used 51,700 direct labor hours.
2. Assume that the company actually incurred $1,020,000 of direct labor cost.
3. Assume that the company actually ran the machines 39,500 hours.
4. Briefly explain what you have learned about the total manufacturing overhead allc
cated to production.
e er
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