The main distributer of natural juices uses two processes for its production process. The fruit juices pass through a distillery and a canning department.Both departments incur overheads; however, management wants to assess the total overheads absorbed in each department. The information belowrelates to the budgeted overheads for each department prepared by the cost controller:For the period ended 30 June 2020 the actual overheads incurred amounted to $100,000,000 of which 60% relates to distillery and the remainder tocanning. The production manager also provided data for the period which indicates that total direct labour hours are 20% more than expected.Meanwhile machine hours are 200,000 and 1,400,000 more than planned for distillery and canning respectively. The budgeted direct wages were thesame as plannedRequired:(a) Outline the two main factors that may result in an under/over absorption of overheads at the entity.(4 marks)(b) Calculate the overhead absorption rates for both departments.(6 marks)(c) Calculate the under/over absorption of overheads for each department. (6 marks)(d) Distinguish between overhead 'apportionment' and 'allocation"?

Answer in summaryAVariation in actual overheads: If the actual overheads incurred differ from the…

Answered: The main distributer of natural juices…

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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Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $390,000 are allocated on the basis of budgeted warehouse - hours. Data Center Department costs of $100,000 are allocated based on the number of computer log - on hours. The costs of operating departments Music and Books are $122,500 and $147,000, respectively. Data on budgeted warehouse - hours and number of computer log - on hours are as follows: Support Departments Production Departments Warehouse Data Center Music Books Department $390,000 Department $100,000 Budgeted costs Budgeted warehouse - hours Number of computer hours $122,500 $147.000 NA 580 1,040 1,600 220 NA 810 1,010 Dr Using the step - down method, what amount of Data Center Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? (Round intermediary calculations to three decimal places.) O A.…
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $310,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $170,000 are allocated based on the number of employees. The costs of operating departments A and B are $192,000 and $288,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Budgeted costs Budgeted maintenance-hours Number of employees Support Departments OA $200,588 OB. $124,235 OC. $135415 OD. $74,260 Maintenance Personnel Department Department $310,000 $170,000 NA 900 Production Departments A B $192,000 $288,000 1,210 660 75 NA 660 Using the step-down method, what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations.) 290
Subject :- Accounting
Don Johnson is the management accountant for Cari-Blocks (CB), which manufactures specialty blocks. CB uses two direct cost categories: direct materials and direct manufacturing labour. Johnson feels that manufacturing overhead is most closely related to material usage. Therefore, CB allocates manufacturing overhead to production based upon pounds of materials used. At the beginning of 2021, CB budgeted annual production of 200,000 blocks and adopted the following standards for each block: Input Cost/Block Direct materials 0.5 Ib. @ $12/lb. $ 6.00 Direct manufacturing labour 1.4 hours @ $20/hour 28.00 Manufacturing overhead: Variable $6/lb. 0.5 Ib. 3.00 Fixed $15/lb. 0.3 Ib. 4.50 Standard cost per block $41.50 Actual results for April 2021 were as follows: Production 24,000 blocks Direct materials purchased 12,000 lb. at $13/lb. Direct materials used 11,450 lb. Direct manufacturing labour 38,000 hours for $798000 Variable manufacturing overhead $68,150 Fixed manufacturing overhead…
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Garfield Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Budgeted Activity Activity Cost Activity Base Casting $99,820 Machine hours Assembly 58,900 Direct labor hours Inspecting 21,252 Number of inspections Setup 33,221 Number of setups Materials handling 34,830 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Machine hours 2,101 1,119 3,220 Direct labor hours 791 2,309 3,100 Number of inspections 724 288 1,012 Number of setups 175 64 239 Number of loads 544 230 774 Units produced 6,569 1,747 8,316
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $370,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $170,000 are allocated based on the number of employees. The costs of operating departments A and B are $216,000 and $324,000, respectively. Data on budgeted maintenance - hours and number of employees are as follows: Budgeted costs Budgeted maintenance - hours Number of employees Support Departments Maintenance Personnel Department Production Departments Department $370,000 ΝΑ A $170,000 $216,000 $324,000 800 1,270 630 B 65 ΝΑ 280 700 Using the direct method, what amount of Maintenance Department costs will be allocated to Department B? (Do not round any intermediary calculations.)
Der Company uses a standard cost system in which it applies manufacturing overhead on the basis of direct labor-hours. Two direct labor-hours are required for each unit produced. The budgeted activity was set at 9,000 units. Manufacturing overhead was budgeted at $135,000 for the period; 20 percent of this cost was fixed. The 17,200 hours worked during the period resulted in production of 8,500 units. Variable manufacturing overhead cost incurred was $108,500 and fixed manufacturing overhead cost was $28,000. The fixed overhead production volume variance for the period was: a) $750 unfavorable. b) $2,500 unfavorable. c) $1,500 unfavorable. d) $1,000 unfavorable.
Betty's Book and Music Store has two service departments, Warehouse and Data Centre. Warehouse Department costs of $175,000 are allocated on the basis of budgeted warehouse-hours. Data Centre Department costs of $75,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $125,000 and $150,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows: Support Departments Production Departments Warehouse Department Data Centre Department Music Books Budgeted costs $175,000 $75,000 $125,000 $150,000 Budgeted warehouse-hours NA 250 500 750 Number of computer hours 100 NA 400 500 Required: Assign the support department costs to the production departments using: The Direct Method (3) The Step-Down Method assigning the Warehouse Department first (4) The Reciprocal Method using linear equations. (4)
XYZ's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $280,000 are allocated based on budgeted warehouse-hours. Data Center Department costs of $80,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $90,000 and $108,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows: Budgeted costs Budgeted warehouse-hours O $122,500 Production Departments O $126,000 Number of computer hours 400 O $98,000 Warehouse Department O $98,000 $280,000 ΝΑ Data Center Department $80,000 500 ΝΑ Support Departments Music $90,000 1,125 900 Books Using the direct method, what amount of Warehouse Department costs will be allocated to Department Books? (Do not round any intermediary calculations.) $108,000 875 700
JohnAssociates produces carburetors for small engines and uses a normal costing system. The following data are available for 2019. Budgeted: Overhead $ 4,500,000 Machine hours 187,500 Direct labor hours 600,000 Actual: Unit produced 750,000 Overhead $4,466,250 Prime cost $ 6,750,000 Machine hours 187,875 Direct labor hours 585,000 Overhead is applied based on direct labor hours. John Associates applies overhead to production based on machine hours instead of direct labor hours. 1) What is the predetermined overhead rate? 2) What is the applied overhead for 2019? 3) Is overhead overapplied or underapplied and by how much? 4) What is the unit cost? 5) How can John Associates decide whether to use direct labor hours or machine hours as the basis Please answer all five questions.. Much appreciated
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $370,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $120,000 are allocated based on the number of employees. The costs of operating departments A and B are $196,000 and $294,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Production Departments Budgeted costs $370,000 Budgeted maintenance- hours Number of employees Maintenance Personnel Department Department 200 Support Departments 90 870 A $120,000 $196,000 $294,000 15 B 1,260 670 280 680 Using the direct method, what amount of Personnel Department costs will be allocated to Department B? (Do not round any intermediary calculations.)

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