The following information presents financial results for the two models from last year: Private Label Sales revenue Direct material Direct labor Branded $786, 000 $ 552,000 234,000 162,000 172, 200 112, 200 Total $1,338,000 406, 200 274, 200 Manufacturing overhead Department A-101 Department A-102 Total overhead The product costing system at EA allocates manufacturing overhead on the basis of direct labor costs. $ 219,600 273, 960 $493,560 Required: a. Compute the profit or loss for each product using plantwide allocation. b. Compute the profit or loss for each product using department allocation. Note: For all requirements, loss amounts should be indicated by a minus sign. Do not round intermediate calculations.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Edlie Accessories (EA) makes travel bags, both for sale under their own label ("Branded') and for other resellers to put their label on the bags ("Private - Label"). The bags sold
through the two channels are similar, but they differ slightly in the quality of materials and detail in the manufacturing process. The manufacturing plant at EA has two departments.
Department A-101 was the original manufacturing facility and many of the machines are original. Department A-102 is new, with state-of-the-art equipment. The new equipment
facilitates the additional care taken with the Branded product. The following information presents financial results for the two models from last year: The product costing system at EA
allocates manufacturing overhead on the basis of direct labor costs. Required: a. Compute the profit or loss for each product using plantwide allocation. The following information
presents financial results for the two models from last year: The product costing system at EA allocates manufacturing overhead on the basis of direct labor costs. a. Compute the
profit or loss for each product using plantwide allocation. b. Compute the profit or loss for each product using department allocation. Note: For all requirements, loss amounts
should be indicated by a minus sign. Do not round intermediate calculations.b. Compute the profit or loss for each product using department allocation. Note: For all requirements,
loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers rounded to the nearest whole number.
Transcribed Image Text:Edlie Accessories (EA) makes travel bags, both for sale under their own label ("Branded') and for other resellers to put their label on the bags ("Private - Label"). The bags sold through the two channels are similar, but they differ slightly in the quality of materials and detail in the manufacturing process. The manufacturing plant at EA has two departments. Department A-101 was the original manufacturing facility and many of the machines are original. Department A-102 is new, with state-of-the-art equipment. The new equipment facilitates the additional care taken with the Branded product. The following information presents financial results for the two models from last year: The product costing system at EA allocates manufacturing overhead on the basis of direct labor costs. Required: a. Compute the profit or loss for each product using plantwide allocation. The following information presents financial results for the two models from last year: The product costing system at EA allocates manufacturing overhead on the basis of direct labor costs. a. Compute the profit or loss for each product using plantwide allocation. b. Compute the profit or loss for each product using department allocation. Note: For all requirements, loss amounts should be indicated by a minus sign. Do not round intermediate calculations.b. Compute the profit or loss for each product using department allocation. Note: For all requirements, loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers rounded to the nearest whole number.
The following information presents financial results for the two models from last year:
Private
Label
$786,000
234,000
162,000
Sales revenue
Direct material
Direct labor
Manufacturing overhead
Department A-101
Department A-102
Total overhead
Branded
$ 552,000
172, 200
112, 200
Total
$ 1,338,000
406, 200
274, 200
$ 219, 600
273, 960
$493,560
The product costing system at EA allocates manufacturing overhead on the basis of direct labor costs.
Required:
a. Compute the profit or loss for each product using plantwide allocation.
b. Compute the profit or loss for each product using department allocation.
Note: For all requirements, loss amounts should be indicated by a minus sign. Do not round intermediate calculations.
Transcribed Image Text:The following information presents financial results for the two models from last year: Private Label $786,000 234,000 162,000 Sales revenue Direct material Direct labor Manufacturing overhead Department A-101 Department A-102 Total overhead Branded $ 552,000 172, 200 112, 200 Total $ 1,338,000 406, 200 274, 200 $ 219, 600 273, 960 $493,560 The product costing system at EA allocates manufacturing overhead on the basis of direct labor costs. Required: a. Compute the profit or loss for each product using plantwide allocation. b. Compute the profit or loss for each product using department allocation. Note: For all requirements, loss amounts should be indicated by a minus sign. Do not round intermediate calculations.
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