Horngren's Accounting, The Financial Chapters (12th Edition)
12th Edition
ISBN: 9780134486789
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 23, Problem S23.9SE
Computing standard
| Learning Objective 4 | |
| The following information relates to Morgan, Inc. s overhead costs for the month: | |
| Static budget variable overhead | $7,800 |
| Static budget fixed overhead | $3,900 |
| Static budget direct labor hours | 1,300 hours |
| Static budget number of units | 5,200 units |
Morgan allocates manufacturing overhead to production based on standard direct labor hours Compute the standard variable overhead allocation rate and the standard fixed overhead allocation rate.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Activity
Clerical support
Facility services
Client consultations
Activity usage for each service follows.
Activity Cost Driver
Documents
Billable hours
Court dates
Budgeted
Cost
Required 1 Required 2
$ 57,600
20,160
72,800
Activity
Clerical support
Facility services
Client consultations
Budgeted Activity Usage
360 documents
2,520 billable hours
28 court dates
Activity Usage
Litigation
210
920
20
Mediation
150
1,600
8
Required:
1. Compute an activity rate for each activity using activity-based costing.
2. Compute overhead cost per unit (case) for both litigation and mediation using activity-based
Total
360
2,520
28
Complete this question by entering your answers in the tabs below.
Compute an activity rate for each activity using activity-based costing. (Round "Activity rate" to 2 c
Budgeted Cost
Budgeted Activity Usage
Activity Rate
A manufacturer uses activity-based costing to assign overhead costs to products. Budgeted cost information for
selected activities for next year follows.
Activity
Purchasing
Cleaning factory
Providing utilities
Activity cost pool
Purchasing
Factory
Expected Cost
$127,600
31,500
63,070
Expected
Costs
Compute activity rates for each of the cost pools. (Round your answers to 2 decimal places.)
Expected
Amount of
Cost Driver
Cost Driver
Purchase orders
Square feet
Square feet
4,400
4,900
Activity Overhead Rate
Expected Usage of Cost Driver
4,488 purchase orders
4,900 square feet
4,900 square feet
per purchase order
per square foot
Combat Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a
commercial fire extinguisher. The home model is a high-volume (54.,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi-
purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of
multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct
labor hours are 96,300 or (1.5 hours x (54,000 + 10,200)). Estimated annual manufacturing overhead is $ 1,585,316. Thus, the
predetermined overhead rate is $ 16.46 or (S 1,585,316 - 96,300) per direct labor hour. The direct materials cost per unit is $18.50
for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the
commercial models.
The company's managers identified six activity cost pools and related…
Chapter 23 Solutions
Horngren's Accounting, The Financial Chapters (12th Edition)
Ch. 23 - Prob. 1QCCh. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems is a start-up company that makes...Ch. 23 - MajorNet Systems has budgeted three hours of...Ch. 23 - MajorNet Systems has budgeted three hours of...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - FrontGrade Systems allocates manufacturing...Ch. 23 - The person probably most responsible for the...
Ch. 23 - HajorNet System’s static budget predicted...Ch. 23 - What is a variance?Ch. 23 - Explain the difference between a favorable and an...Ch. 23 - What is a static budget performance report?Ch. 23 - How do flexible budgets differ from static...Ch. 23 - How is a flexible budget used?Ch. 23 - What are the two components of the static budget...Ch. 23 - What is a flexible budget performance report?Ch. 23 - What is a standard cost system?Ch. 23 - Explain the difference between a cost standard and...Ch. 23 - Give the general formulas for determining cost and...Ch. 23 - How does the static budget affect cost and...Ch. 23 - List the direct materials variances, and briefly...Ch. 23 - List the direct labor variances, and briefly...Ch. 23 - List the variable overhead variances, and briefly...Ch. 23 - List the fixed overhead variances, and briefly...Ch. 23 - How is the fixed overhead volume variance...Ch. 23 - What is management by exception?Ch. 23 - List the eight product variances and the manager...Ch. 23 - Briefly describe how journal entries differ in a...Ch. 23 - What is a standard cost income statement?Ch. 23 - Matching terms Learning Objective 1 Match each...Ch. 23 - Preparing flexible budgets Learning Objective 1...Ch. 23 - Calculating flexible budget variances Learning...Ch. 23 - Matching terms Learning Objective 2 Match each...Ch. 23 - Identifying the benefits of standard costs...Ch. 23 - Calculating materials variances Learning Objective...Ch. 23 - Calculating labor variances Learning Objective 3...Ch. 23 - Interpreting material and labor variances Learning...Ch. 23 - Computing standard overhead allocation rates...Ch. 23 - Computing overhead variances Learning Objective 4...Ch. 23 - Understanding variance relationships Learning...Ch. 23 - Journalizing materials entries Learning Objectives...Ch. 23 - Journalizing labor entries Learning Objectives 6...Ch. 23 - Preparing a standard cost income statement...Ch. 23 - Preparing a flexible budget Learning Objective 1...Ch. 23 - Preparing a flexible budget performance report...Ch. 23 - Preparing a flexible budget performance report...Ch. 23 - Defining the benefits of setting cost standards...Ch. 23 - Calculating materials and labor variances Learning...Ch. 23 - Computing overhead variances Learning Objective 4...Ch. 23 - Calculating overhead variances Learning Objective...Ch. 23 - Preparing a standard cost income statement...Ch. 23 - Preparing journal entries Learning Objective 6 MOH...Ch. 23 - Preparing a standard cost income statement...Ch. 23 - Preparing a flexible budget performance report...Ch. 23 - Preparing a flexible budget computing standard...Ch. 23 - Computing standard cost variances and reporting to...Ch. 23 - Computing and journalizing standard cost variances...Ch. 23 - Prob. P23.29APGACh. 23 - Preparing a flexible budget performance report...Ch. 23 - Preparing a flexible budget and computing standard...Ch. 23 - Prob. P23.32BPGBCh. 23 - Prob. P23.33BPGBCh. 23 - Preparing a standard cost income statement...Ch. 23 - Prob. P23.35CTCh. 23 - Preparing a flexible budget and performance report...Ch. 23 - Prob. 23.1TIATCCh. 23 - Decision Case 23-1 Suppose you manage the local...Ch. 23 - Fraud Case 23-1 Drew Castello, general manager of...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Hello tutor answer the questionarrow_forwardPREDETERMINED FACTORY OVERHEAD RATE Marston Enterprises calculates a predetermined factory overhead rate so that factory overhead may be applied to production during the month. It calculates the overhead using three different methods and then decides which one to use. Total estimated factory overhead costs are 600,000. Total estimated direct labor hours are 30,000. Total estimated direct labor costs are 1,200,000. Total machine hours are estimated to be 200,000. Calculate the predetermined overhead application rates based on (1) direct labor hours, (2) direct labor costs, and (3) machine hours.arrow_forwardPREDETERMINED FACTORY OVERHEAD RATE Millerlile Enterprises calculates a predetermined factory overhead rate so that factory overhead may be applied to production during the month. It calculates the overhead using three different methods and then decides which one to use. Total estimated factory overhead costs are 540,000. Total estimated direct labor hours are 50,000. Total estimated direct labor costs are 900,000. Total machine hours are estimated to be 80,000. Calculate the predetermined overhead application rates based on (1) direct labor hours, (2) direct labor costs, and (3) machine hours.arrow_forward
- Question Content Area Given the following information, determine the activity rate for setups. Activity Total Activity-Base Usage Budgeted Activity Cost Setups 10,100 $63,200 Inspections 24,100 $137,300 Assembly (dlh) 72,000 $400,600arrow_forward4-34 Job costing; variation on actual, normal, and variation from normal costing. Creative Solutionsdesigns Web pages for clients in the education sector. The company’s job-costing system has a singledirect cost category (Web-designing labor) and a single indirect cost pool composed of all overhead costs.Overhead costs are allocated to individual jobs based on direct labor-hours. The company employs six Webdesigners. Budgeted and actual information regarding Creative Solutions follows:Budget for 2017:Direct labor costs $273,000Direct labor-hours 10,500Overhead costs $157,500Actual results for 2017:Direct labor costs $285,000Direct labor-hours 11,400Overhead costs $159,6001. Compute the direct-cost rate and the indirect-cost rate per Web-designing labor-hour for 2017 under(a) actual costing, (b) normal costing, and (c) the variation from normal costing that uses budgetedrates for direct costs.2. Which method would you suggest Creative Solutions use? Explain.3. Creative Solutions’ Web…arrow_forwardI have the following information: direct materials $250 and total manufacturing cost $700. Overhead applied to jobs at a rate of 200% of direct labor cost. This is for Chapter 2 job costing in managerial accounting. I am supposed to figure out conversion cost, direct labor cost, and manufacturing overhead. I know the formula for conversion cost= direct labor + manufacturing OH Prime cost= direct labor + direct materials How do I figure out direct labor cost with the given information? The learning objective states calcualte predetermined overhead rate, but I do not have estimated manufacturing cost and estimated labor. Can you please help? Thanks, Erica Gordonarrow_forward
- es D ♪ Mc Graw Classes N Netflix Activity Assembly Product design Electricity Setup Total Craftmore Machining reports the following budgeted overhead cost and related data for this year. Budgeted Cost $ 477,750 73,500 24,500 61,250 $ 637,000 Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) Setups Required 1 25 Required 2 Dashboard Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) Setups Required: 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 13,000 direct labor hours. 2. Job 31 used 320 direct labor hours and Job 42 used 560 direct labor hours. Allocate overhead cost to each job using the single plantwide overhead rate from part 1. 3. Compute an activity rate for each activity using activity-based costing. 4. Allocate overhead costs to Job 31 and Job 42 using activity-based costing. 80 Job 31 Activity Usage Required 3 320 35 60 5 Complete this question by…arrow_forwardMia Company uses activity-based costing and reports the following for this year. Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage Cutting $ 33,600 Machine hours (MH) 4,800 machine hours Assembly 88,000 Direct labor hours (DLH) 8,800 direct labor hours Total $ 121,600 (a) Compute an activity rate for each activity using activity-based costing.(b) Allocate overhead costs to a job that uses 34 machine hours and 29 direct labor hours.arrow_forwardNeed helparrow_forward
- The subject is Managerial Accountingarrow_forwardQuan If an 80% learning curve is applicable, Grosse Point's total cost on this order would be estimated at P26,400. P32,000. c.. P38,000. a. d. P41,800. (CMA, Adapted) b. A particular manufacturing job is subject to an estimated 90% learning 59. curve. The first unit required 50 labor hours to complete. What is the cumulative average time per unit after four units are completed? 50.0 hours 45.0 hours 40.5 hours с. 40.0 hours d. a. b. 60. Grosse Point Manufacturing recently completed and sold an order of 50 units that had costs as follows: Direct materials Direct labor (1,000 hours x P8.50) Variable overhead (1,000 hours x P4.00)* Fixed overhead P 1,500 8,500 4,000 1,400 P15,400 Applied on the basis of direct labor hours Applied at the rate of 10% of variable cost If Grosse Point had experienced a 70% learning curve, the bid for the 150 units would show a 30% reduction in the total direct labor hours required with no learning curve. a. b. include increased fixed overhead costs. be 10%…arrow_forwardJob costing; variation on actual, normal, and variation from normal costing. Creative Solutions designs Web pages for clients in the education sector. The company’s job-costing system has a single direct cost category (Web-designing labor) and a single indirect cost pool composed of all overhead costs. Overhead costs are allocated to individual jobs based on direct labor-hours. The company employs six Web designers. Budgeted and actual information regarding Creative Solutions follows:arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY