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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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
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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
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…