QS 17-5 Computing departmental overhead rates LO P2 Rafner Manufacturing identified the following budgeted data in its two production departments. Manufacturing overhead costs Direct labor hours Machine hours Assembly $1,247,500 12,500 DLH 6,500 MH Finishing $650,000 20,500 DLH 16,500 MH Required: What are the company's departmental overhead rates if the assembly department assigns overhead based on direct labor hours the finishing department assigns overhead based on machine hours? The departmental overhead rate for Assembly Total actual manufacturing costs The departmental overhead rate for Finishing $ 100 $ 2.56

QS 17-5 Computing departmental overhead rates LO P2 Rafner Manufacturing identified the following budgeted data in its two production departments. Manufacturing overhead costs Direct labor hours Machine hours Assembly $1,247,500 12,500 DLH 6,500 MH Finishing $650,000 20,500 DLH 16,500 MH Required: What are the company's departmental overhead rates if the assembly department assigns overhead based on direct labor hours the finishing department assigns overhead based on machine hours? The departmental overhead rate for Assembly Total actual manufacturing costs The departmental overhead rate for Finishing $ 100 $ 2.56

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Description: QS 17-5 Computing departmental overhead rates LO P2Rafner Manufacturing identified the following budgeted data in its two production departments.Manufacturing overhead costsDirect labor hoursMachine hoursAssembly$1,247,50012,500 DLH6,500 MHFinishing

Accounting (Text Only)

26th Edition

ISBN:9781285743615

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter22: Budgeting

Section: Chapter Questions

Problem 22.8EX

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Activity-based department rate product costing and product cost distortions Big Sound Inc. manufactures two products: receivers and loud-speakers. The factory overhead incurred is as follows: Indirect labor 400,400 Cutting Department 198,800 Finishing Department 114,800 Total 714,000 The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Budgeted Activity Cost Activity Base Setup 138,600 Number of setup Quality Control 261,800 Number of inspections Total 400,400 The activity-base usage quantities and units produced for the two products follow: Number o Setup Number of Inspections Direct Labor HoursSubassembly Direct Labor HoursFinal Assembly Units Produced Snowboards 430 5,000 4,000 2,000 6,000 Skis _70 2,500 2,000 4,000 6,000 Total 500 7,500 6,000 6,000 12,000 Instructions 1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is 5420,000 and 294,000 for the Subassembly and Final Assembly departments, respectively. 2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1). 3. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. 4. Determine the total and per-unit cost assigned to each product under activity-based costing. 5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.
Activity-based and department rate product costing and product cost distortions Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Indirect labor 507,000 Cutting Department 156,000 Finishing Department 192,000 Total 855,000 The activity hase associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Budgeted Activity Cost Activity Base Production control 237,000 Number of production runs Materials handling 270,000 Number of moves Total 507,000 The activity-base usage quantities and units produced for the two products follow: Number o Production Runs Number of Moves Direct Labor HoursCutting Direct Labor HoursFinishing Units Produced Snowboards 430 5,000 4,000 2,000 6,000 Skis _70 2,500 2,000 4,000 6,000 Total 500 7,500 6,000 6,000 12,000 Instructions 1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is 315,000 and 540,000 for the Cutting and finishing departments, respectively. 2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1). 3. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. 4. Determine the total and per-unit cost assigned to each product under activity-based costing. 5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.
Budget performance report for a cost center Sneed Industries Company sells vehicle parts to manufacturers of heavy construction equipment. The Crane Division is organized as a cost center. The budget for the Crane Division for the month ended August 31, 20Y6, is as follows (in thousands): During August, the costs incurred in the Crane Division were as follows: Instructions For which costs might the director be expected to request supplemental reports?
Budget performance report for a cost center Sneed Industries Company sells vehicle parts to manufacturers of heavy construction equipment. The Crane Division is organized as a cost center. The budget for the Crane Division for the month ended August 31, 20Y6, is as follows (in thousands): During August, the costs incurred in the Crane Division were as follows: Instructions Prepare a budget performance report for the director of the Crane Division for the month of August.
Activity-based department rate product costing and product cost distortions Big Sound Inc. manufactures two products: receivers and loud-speakers. The factory overhead incurred is as follows: Indirect labor 400,400 Cutting Department 198,800 Finishing Department 114,800 Total 714,000 The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Budgeted Activity Cost Activity Base Setup 138,600 Number of setup Quality Control 261,800 Number of inspections Total 400,400 The activity-base usage quantities and units produced for the two products follow: Number o Setup Number of Inspections Direct Labor HoursSubassembly Direct Labor HoursFinal Assembly Units Produced Snowboards 430 5,000 4,000 2,000 6,000 Skis _70 2,500 2,000 4,000 6,000 Total 500 7,500 6,000 6,000 12,000 Instructions 1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is 5420,000 and 294,000 for the Subassembly and Final Assembly departments, respectively. 2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1). 3. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. 4. Determine the total and per-unit cost assigned to each product under activity-based costing. 5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.
Activity-based and department rate product costing and product cost distortions Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Indirect labor 507,000 Cutting Department 156,000 Finishing Department 192,000 Total 855,000 The activity hase associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Budgeted Activity Cost Activity Base Production control 237,000 Number of production runs Materials handling 270,000 Number of moves Total 507,000 The activity-base usage quantities and units produced for the two products follow: Number o Production Runs Number of Moves Direct Labor HoursCutting Direct Labor HoursFinishing Units Produced Snowboards 430 5,000 4,000 2,000 6,000 Skis _70 2,500 2,000 4,000 6,000 Total 500 7,500 6,000 6,000 12,000 Instructions 1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is 315,000 and 540,000 for the Cutting and finishing departments, respectively. 2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1). 3. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. 4. Determine the total and per-unit cost assigned to each product under activity-based costing. 5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.
Product costing and decision analysis for a service company Pleasant Slay Medical Inc. wishes to determine its product costs. Pleasant Stay offers a variety of medical procedures (operations) that are considered its products. The overhead has been separated into three major activities. The annual estimated activity costs and activity bases follow: Activity Budgeted Activity Cost Activity Base Scheduling and admitting 432,000 Number of patients Housekeeping 4,212,000 Number of patient days Nursing 5,376,000 Weighted care unit Total costs 10,020,000 Total patient days are determined by multiplying the number of patients by the average length of stay in the hospital. A weighted care unit (wcu) is a measure of nursing effort used to care for patients. There were 192,000 weighted care units estimated for the year. In addition, Pleasant Stay estimated 6,000 patients and 27,000 patient days for the year. (The average patient is expected to have a a little more than a four-day stay in the hospital.) During a portion of the year, Pleasant Stay collected patient information for three selected procedures, as follows: Activity-Base Usage Procedure A Number of patients 280 Average length of stay 6 days Patient days 1,680 Weighted care units 1,200 Procedure B Number of patients 650 Average length of stay 5 days Patient days 3,250 Weighted care units 6,000 Procedure C Number of patients 1,200 Average length of stay 4 days Patient days 4,800 Weighted care units 24,000 Private insurance reimburses the hospital for these activities at a fixed daily rate of 406 per patient day for all three procedures. Instructions 1. Determine the activity rates. 2. Determine the activity cost for each procedure. 3. Determine the excess or deficiency of reimbursements to activity cost. 4. Interpret your results.
Exercise 17-9 (Algo) Allocating overhead using plantwide rate and departmental rates LO P1, P2 Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). Fabricating Assembly Overhead cost $ 1,000,000 $ 384,000 Direct labor hours 125,000 DLH 48,000 DLH Machine hours 100,000 MH 82,500 MH Laval reports the following for one of its products, a desk lamp. Number of Units Fabricating Department Assembly Department Direct Labor Hours per Unit Machine Hours per Unit Direct Labor Hours per Unit Machine Hours per Unit Desk lamp 5,000 4 DLH per unit 2 MH per unit 1 DLH per unit 0.4 MH per unit Required:1. Determine the plantwide overhead rate using 173,000 direct labor hours as the allocation base.2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate.3. Compute departmental overhead rates based on machine hours in the…
cr OBJECTIVE Problem 4-57 Overhead Rates, Unit Costs al r an Folsom Company manufactures specialty tools to customer order. There are three producing departments. Departmental information on budgeted overhead and various activity measures for the coming year is as follows: EXCEL Welding Assembly Finishing Estimated overhead $220,000 $ 62,000 $150,000 Direct labor hours Direct labor cost 4,500 10,000 6,000 $ 90,000 $150,000 $120,000 Machine hours 5,000 1,000 2,000 Currently, overhead is applied on the basis of machine hours using a plantwide rate. However, Janine, the controller, has been wondering whether it might be worthwhile to use departmental overhead rates. She has analyzed the overhead costs and drivers for the various de- partments and decided that Welding and Finishing should base their overhead rates on machine hours and that Assembly should base its overhead rate on direct labor hours. Janine has been asked to prepare bids for two jobs with the following information: Job 1…
Question 12 Stingrays Company applies overhead to products using a predetermined overhead rate based on machine hours. The tolong pertanto the ar Budgeted manufacturing overhead: $45,000 Actual manufacturing overhead: $51,000 Budgeted machine hours: 200 Actual machine hours: 150 How much is overhead applied to products during the year? O $60,000 O $38,250 O $33,750 O $51,000
QUESTION 3 The Royale Company has a standard cost system in which manufacturing overhead is applied to units of product on the basis of direct labor-hours (DLHS). The company recorded the following data relating to manufacturing overhead for September: Number of units completed. hours per unit Quantity variance. applied fixed overhead cost in the company's overhead budget for September was: O $45,900 O $54,768 O $49,920 O $47,703 31,200 units: Standard direct labor- $51,300; $0.85 per DLH. The amount of 1.6 DLHS; Denominator activity 54,000 DLHS; Actual fixed overhead costs incurred $3,468 Unfavorable; Fixed portion of the predetermined overhead rate
Question 4 A production department has a budgeted production overheads of $180,000 and budgeted activity of 45,000 machine hours. Overheads are absorbed on a machine hour basis. Required Calculate the under-/over-absorbed overhead, and note the reasons for the under-/over-absorption in the following circumstances. (a) Actual overheads cost $170,000 and 45,000 machine hours were worked. (b) Actual overheads cost $180,000 and 40,000 machine hours were worked. (c) Actual overheads cost $170,000 and 40,000 machine hours were worked.