The Wonder Drug Company's total overhead costs at various levels of activity are presented below:MonthSeptemberOctoberNovemberDecemberAssume that the overhead costs above consist of indirect labor, scheduling salaries, and maintenance. The breakdown of these costs for the month of November is as follows:Indirect labor (V)Maintenance (M)Scheduling Salaries (F)a.Direct Labor Hours15,00012,00018,00021,000Total OverheadDirect Labor HoursHighRequired:(a.) Using the high-low method, determine the cost formula for maintenance.(b.) Express the company's total overhead costs in linear equation form.$21,000$219,600197,400125,000542,000Low12,000Total Overhead$472,000409,400542,000604,700Difference

Name: The Wonder Drug Company's total overhead costs at various levels of a
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: The Wonder Drug Company's total overhead costs at various levels of activity are presented below:MonthSeptemberOctoberNovemberDecemberAssume that the overhead costs above consist of indirect labor, scheduling salaries, and maintenance. The breakdown

The costs incurred for the production are classified as fixed, variable and mixed costs. The fixed…

Business

Accounting

The Wonder Drug Company's total overhead costs at various levels of activity are presented below: Month September October November December Direct Labor Hours 15,000 12,000 $ 18,000 21,000 Assume that the overhead costs above consist of indirect labor, scheduling salaries, and maintenance. The breakdown of these costs for the month of November is as follows: Indirect labor (V) Maintenance (M) 219,600 197,400 125,000 Scheduling Salaries (F) 542,000 $ Total Overhead S 472,000 409,400 542,000 604,700 Required: (a.) Using the high-low method, determine the cost formula for maintenance. (b.) Express the company's total overhead costs in linear equation form.

The Wonder Drug Company's total overhead costs at various levels of activity are presented below: Month September October November December Direct Labor Hours 15,000 12,000 $ 18,000 21,000 Assume that the overhead costs above consist of indirect labor, scheduling salaries, and maintenance. The breakdown of these costs for the month of November is as follows: Indirect labor (V) Maintenance (M) 219,600 197,400 125,000 Scheduling Salaries (F) 542,000 $ Total Overhead S 472,000 409,400 542,000 604,700 Required: (a.) Using the high-low method, determine the cost formula for maintenance. (b.) Express the company's total overhead costs in linear equation form.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Sagar
Berry Company applies overhead on the basis of direct labor hours. Given the following data, calculate overhead applied and the under- or over-application of overhead for the period: Estimated annual overhead cost $450,000 Actual annual overhead cost $445,000 Estimated direct labor hours 90,000 Actual direct labor hours 88,000
The following information pertains to Whitestone Industries for the year: Estimated total overhead costs Estimated direct labor costs Actual direct labor costs Actual overhead costs Activity base $37,500 25,000 22,500 36,000 Direct labor costs What is the predetermined overhead rate for Whitestone Industries for the year? Oa. 62.5% Ob. 66.7% Oc. 150% Od. 160%
Assume the following: 1. Estimated fixed manufacturing overhead for the coming period of $220,000 2. Estimated variable manufacturing overhead of $2.00 per direct labor hour 3. Actual manufacturing overhead for the period of $320,000 4. Actual direct labor-hours worked of 54,000 hours 5. Estimated direct labor-hours to be worked in the coming period of 55,000 hours. The amount of overhead applied to production during the period is closest to: Note: Round your intermediate value of "Predetermined overhead rate" to two decimal places. Multiple Choice $325,926. $324,000. $336,004.
Crosshill Company's total overhead costs at various levels of activity are presented below: Month April May June July Machine-Hours 70,000 60,000 80,000 90,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 60,000-machine-hour level of activity in May is as follows: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost Total Overhead Cost $200,200 $177,300 $223,100 $246,000 $ 48,000 21,000 108,300 $177,300 The company wants to break down the maintenance cost into its variable and fixed cost elements. Maintenance cost in July Required: 1. Estimate how much of the $246,000 of overhead cost in July was maintenance cost. (Hint: To do this, first betermine how much of the $246,000 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Round the "Variable cost per unit" to 2 decimal places.)
d. Assume that the actual level of activity next year was 36,000 direct labor hours and that manufactur- ing overhead was $341,550. Determine the underapplied or overapplied manufacturing overhead at the end of the year. e. Describe two ways of handling any underapplied or overapplied manufacturing overhead at the end of the year. e. Describe two ways of handling any underapplied or overapplied manufacturing overhead at the end of the year.
Crosshill Company's total overhead costs at various levels of activity are presented below: Month Machine- Hours Total Overhead Cost April 70,000 $ 202,200 May 60,000 $ 180,300 June 80,000 $ 224,100 July 90,000 $ 246,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 60,000-machine-hour level of activity in May is as follows: Utilities (variable) $ 52,200 Supervisory salaries (fixed) 21,000 Maintenance (mixed) 107,100 Total overhead cost $ 180,300 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $246,000 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how much of the $246,000 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Round the "Variable cost per unit" to 2 decimal places.) 2. Using the high-low…
Total Cost FormulaDavis Company has analyzed its overhead costs and derived a general formula for their behavior: $55,000 + $14 per direct labor hour employed. The company expects to use 50,000 direct labor hours during the next accounting period. What overhead rate per direct labor hour should be applied to jobs worked during the period? Round answer to two decimal places. Overhead rate per direct labor hour $_________
Your Company uses a predetermined overhead rate in applying overhead to production orders on a labor cost basis in Department A and on a machine-hours basis in Department B. At the beginning of the most recently completed year, the company made the following estimates: Dept. A Dept. B Direct labor cost $56,000 $33,000 Manufacturing overhead $67,200 $45,000 Direct labor hours 8,000 9,000 Machine hours 4,000 15,000 The Johnson job used 300 machine hours and incurred $5,000 of labor costs. What was the total overhead applied to this job?
The chief cost accountant for Voltaire Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning May 1 would be $2,340,000 and total direct labor costs would be $1,800,000. During May, the actual direct labor cost totaled $145,000 and factory overhead cost incurred totaled $192,100. Question Content Area a. What is the predetermined factory overhead rate based on direct labor cost? Enter your answer as a whole percent not in decimals. fill in the blank 1772e2fb3039fb1_1 % Question Content Area b. Journalize the entry to apply factory overhead to production for May. If an amount box does not require an entry, leave it blank. blank - Select - - Select - - Select - - Select - Question Content Area c. What is the May 31 balance of the account Factory Overhead—Blending Department? Amount: $fill in the blank 1ea1070e903a021_1 Debit or Credit? d. Does the balance in part (c) represent overapplied or underapplied factory…
Reynolds Manufacturers Inc. has estimated total factory overhead costs of $88,800 and expected direct labor hours of 11,100 for the current fiscal year. If job number 117 incurs 2,000 direct labor hours, Work in Process will be debited and Factory Overhead will be credited for Oa. $88,800 b. $2,000 Oc. $44,400 Od. $16,000
company's total overhead cost at various levels of activity is presented below: Month March April May June Machine Hours 5,000 4,000 6,000 8,000 Total Overhead Cost $ 38,750 $ 31,000 $ 46,500 $ 55,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 4,000 machine-hour level of activity is as follows: Utilities (considered variable) $8,000 Supervisory salaries (considered fixed) $5,000 Maintenance (considered mixed) $18,000 Total overhead cost $31,000 Suppose the company uses the high-low method to estimate a cost formula for mixed costs. What is the total maintenance cost the company expects to incur at an activity level of 6,900 machine hours? ○ $29,600 $29,200 O $30,400 $29,900