Fundamental Managerial Accounting Concepts with Access
Fundamental Managerial Accounting Concepts with Access
7th Edition
ISBN: 9781259683770
Author: Edmonds
Publisher: MCG
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Chapter 5, Problem 8ESB

a

To determine

The overhead cost that has been allocated to 5,000 units of PFT200.

b

To determine

The overhead cost that has been allocated to 5,000 PFT200 using activity-based costing.

c

To determine

The overhead cost per unit for PFT200 using direct labor hour and activity-based costing and the product-selling price for each allocation system.

d

To determine

Whether PFT200 would be under-priced or overpriced suppose Company O uses direct labor as the allocation base and explain the manner in which over or under costing would affect Company O profitability.

e

To determine

Comment on the rationality of using the allocated facility-level costs in pricing decisions and is it necessary to include the other costs in cost-plus pricing decisions and if it is necessary what are all the cost to be included.

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1. Record the proper journal entry for each transaction. 2. By the end of​ January, was manufacturing overhead overallocated or​ underallocated? By how​ much?
Rocky River Fast Lube does oil changes on vehicles in 15 minutes or less. The variable cost associated with each oil change is $12 (oil, filter, and 15 minutes of employee time). The fixed costs of running the shop are $8,000 each month (store manager salary, depreciation on shop and equipment, insurance, and property taxes). The shop has the capacity to perform 4,000 oil changes each month.
The formula to calculate the amount of manufacturing overhead to allocate to jobs​ is:         Question content area bottom Part 1     A. predetermined overhead rate times the actual amount of the allocation base used by the specific job.   B. predetermined overhead rate divided by the actual allocation base used by the specific job.   C. predetermined overhead rate times the estimated amount of the allocation base used by the specific job.   D. predetermined overhead rate times the actual manufacturing overhead used on the specific job.
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