Scenario The Francis Corporation operates two service and two producing departments in its production of go carts. The budgeted overhead costs directly associated with the departments and other pertinent data for an upcoming month are as follows: Overhead Costs Machine Hours Number of Employees 19.67 (rounded) 16.67 (rounded) 3.00 14.74 (rounded) Service & Production Departments Data Service Departments Maintenance $144,000 20 O 15.87 Personnel $80,000 16 Personnel costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours. Assume the Assembly department uses direct labor hours to allocate its cost is overhead costs. For the upcoming month, the estimated direct labor hours is estimated is 19,200 hours. Question What will be the predetermined overhead rate for the Assembly department for the upcoming month? Production Departments Tooling $280,000 30,000 60 Assembly $320,000 20,000 100

Scenario The Francis Corporation operates two service and two producing departments in its production of go carts. The budgeted overhead costs directly associated with the departments and other pertinent data for an upcoming month are as follows: Overhead Costs Machine Hours Number of Employees 19.67 (rounded) 16.67 (rounded) 3.00 14.74 (rounded) Service & Production Departments Data Service Departments Maintenance $144,000 20 O 15.87 Personnel $80,000 16 Personnel costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours. Assume the Assembly department uses direct labor hours to allocate its cost is overhead costs. For the upcoming month, the estimated direct labor hours is estimated is 19,200 hours. Question What will be the predetermined overhead rate for the Assembly department for the upcoming month? Production Departments Tooling $280,000 30,000 60 Assembly $320,000 20,000 100

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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Subject :- Accounting
A. The South Department of ABC Corporation is a cost center. The budget for the month of March 20X2 is as follows: Sales salaries 406,725 System support salaries 222, 502 Customer relation salaries 75,975 Accounting salaries 48,345 Depreciation of plant and equipment 45,700 Repairs and maintenance 134,200 Insurance and property taxes 20,245 During March 20X2 the following costs were incurred by South Department: Sales salaries 406,205 System support salaries 222, 450 Customer relation salaries 80,120 Accounting salaries 48,245 Depreciation of plant and equipment 45,700 Repairs and maintenance 138,950 Insurance and property taxes 20,500 REQUIRED: Prepare a performance report for the manager of South Dept for March 20x2. Explain which costs the manager might be expected to request additional reports.
Required information Use the following information for the Quick Studies below. (Algo) Rafner Manufacturing has the following budgeted data for its two production departments. Budgeted Data Overhead cost Direct labor hours Machine hours. Assembly 12,600 direct labor hours 5,400 machine hours Department Assembly Finishing Total $ 1,461,600 QS 17-8 (Algo) Allocating overhead with departmental rates LO P2 Allocate overhead to a job that uses 76 direct labor hours in the Assembly department and uses 62 machine hours in the Finishing department. Departmental Overhead Rate Hours Used $939,400 Finishing 19,400 direct labor hours 15,400 machine hours $ $ Overhead Allocated 0 0 0
JPS CC collected the following statistics in order to allocate their overheads among the various departments: Cost items Production A Production B Service C Value of equipment N$ 15 000 N$ 9 000 N$ 6 000 Number of employees 36 24 20 Floor space 400m^2 300m^2 200m^2 Material used N$ 40 000 N$ 30 000 N$ 5 000 Direct labour hours 1 300 700 905 Machine hours 450 305 195 the following amounts represent the budgeted overheads for 2019: Depreciation on equipment 900 Rent of factor building 2 250 Electricity factory 900 Protective clothing 800 Cafeteria 720 Insurance building 450 Insurance machinery 750 Overhead allocation rates are based on labour hours, while the secondary apportionment of the service department takes place according to machine hours. Required: (a) Calculate the overhead analysis of each of the two production departments for 2003 (b) Calculate the absorption rate for the production departments. (c) What causes under/over absorption rates.
Main Company has two service departments, Factory administration and Maintenance, and two operating departments, Cutting and Assembly. Selected budgeted information relating to these departments for the next year of operation is given below: Service department Operating Department Factory admin Maintenance Cutting Assembly Departmental costs R113 400 R80 000 R700 000 R600 000 Number of employees 3 5 40 60 Total labour hours 4 000 6 000 80 000 120 000 The company allocates service department costs by the step method. Factory administration costs are allocated first on the basis of number of employees and then Maintenance costs are allocated on the basis of total labour hours. The total Maintenance costs allocated to the Cutting Department is closest to: A. R31 068 B. R34 160 C. R32 000 D. R51 240
Use the following information for the Quick Studies below. (Algo) Rafner Manufacturing has the following budgeted data for its two production departments. Budgeted Data Overhead cost Direct labor hours Machine hours $ 1,389,900 QS 17-7 (Algo) Computing departmental overhead rates LO P2 What is the Assembly department overhead rate using direct labor hours? What is the Finishing department overhead rate using machine hours? Assembly 12,300 direct labor hours. 5,700 machine hours The departmental overhead rate for Assembly Budgeted manufacturing costs S Budgeted overhead costs Actual machine hours Answer is complete but not entirely correct. Actual machine hours The departmental overhead rate for Finishing $ 1,389,900 5,700 863,500 $ 15,700 $ 55 244 per direct labor hour per machine hour. $ 863,500 Finishing 19,700 direct labor hours. 15,700 machine hours
III. Folsom Company manufactures specialty tools to customer order. There are three producing departments. Departmental information on budgeted overhead and various activity measures for the coming year is as follows: Estimated overhead Direct labor hours Direct labor cost Machine hours Direct materials Direct labor cost Direct labor hours: Welding $ 220,000 $ 4,500 90,000 5,000 Welding Assembly Finishing Number of machine hours: Welding Assembly Finishing Assembly $ 62,000 10,000 $ 150,000 1,000 Currently, overhead is applied on the basis of machine hours using a plantwide rate. However, Janine, the controller, has been wondering whether it might be worthwhile to use departmental overhead rates. She has analyzed the overhead costs and drivers for the various departments and decided that Welding and Finishing should base their overhead rates on machine hours and that Assembly should base its overhead rate on direct labor hours. Janine has been asked to prepare bids for two jobs with…
Use the Information below to answer the two questions that follow. A company provides delivery services and uses two activity measures for its costs: the miles driven and the number of customer order. For the most recent month, the company reported the following information: Actual $ 12,940 $ 22 per mile $ 13 per order Budgeted Fixed cost per month Varlable cost per mile Varlable cost per order $ 26 $ 12 Miles driven Customer orders Budgeted 74 480 Actual 64miles 460 orders Spending Varlance for total costs $203 Unfavorable Q. What was the company's budgeted fixed cost per month? ANS. S Q. What was the company's activity variance for the month? ANS. $ (Click to select) v
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Cost Formulas $16.30g $4,300 +$1.50q $5,300 + $0.40g $1,400 + $0.30q $18,200+ $2.70q $8,400 $2,600 $13,800 + $0.60q The Production Department planned to work 4,200 labor-hours in March; however, it actually worked 4,000 labor-hours during the month. Its actual costs incurred in March are listed below: Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration Required: Actual Cost Incurred in March $ 66,780 $ 9,780 $ 7,370 2,870 $ 29,000 $ 8,800 $ 2,600 $ 15,550 1. Prepare the Production…
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month: Direct labor Indirect labor Utilities Supplies Equipment depreciation. Factory rent Property taxes Factory administration Cost Formulas $16.10q $4,600+ $1.70q $5,000+ $0.509 $1,700+ $0.30q $18,700+ $2.80q $8,300 Direct labor Indirect labor Utilities Supplies Equipment depreciation Factory rent Property taxes Factory administration $3,000 $13,400+ $0.60q The Production Department planned to work 4,100 labor-hours in March; however, it actually worked 3,900 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March $ 64,330 $ 10,750 $ 7,440 $ 3,140 $ 29,620 $ 8,700 $3,000 $ 15,090 Required: 1. Prepare the Production…
Question 2. A company manufactures two products, X and Y, for which the following information is available Particulars Budgeted production (units) Product X 4,000 Product Y 6,000 Labour hours per unit 5 8 Number of production runs required 4 6 Number of inspections during production 3 2 Production set-up costs OMR 350,000 Inspection costs OMR 150,000 Total overhead costs OMR 500,000 Using Activity Based Costing, calculate the budgeted overhead cost per unit for Product X and Product Y.