You Answered Correct Answers one manufacturing overhead cost pool. Harmony allocates manufacturing overhead costs using direct labor costs. Harmony provides the following information: Overhead is allocated at $3/direct labor dollar. Question: How much overhead is allocated to jobs during 20X1? Direct Materials Cost Direct Ming Labor Cost Mfng Overhead Cost Budget for 20X1 Actual Results for 20X1 2,900,000 $3,120,000 $1,500,000 $4,500,000 Direct Ming Labor Hours 40,000 4,350,000 (with margin: 0) $1,900,000 $1,450,000 $3,355,000 50,000

You Answered Correct Answers one manufacturing overhead cost pool. Harmony allocates manufacturing overhead costs using direct labor costs. Harmony provides the following information: Overhead is allocated at $3/direct labor dollar. Question: How much overhead is allocated to jobs during 20X1? Direct Materials Cost Direct Ming Labor Cost Mfng Overhead Cost Budget for 20X1 Actual Results for 20X1 2,900,000 $3,120,000 $1,500,000 $4,500,000 Direct Ming Labor Hours 40,000 4,350,000 (with margin: 0) $1,900,000 $1,450,000 $3,355,000 50,000

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 4CMA: Cynthia Rogers, the cost accountant for Sanford Manufacturing, is preparing a management report that...

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Cost Flows Consider the following independent jobs. Overhead is applied in Department 1 at the rate of 6 per direct labor hour. Overhead is applied in Department 2 at the rate of 8 per machine hour. Direct labor wages average 10 per hour in each department. Required: Fill in the missing data for each job.
Cynthia Rogers, the cost accountant for Sanford Manufacturing, is preparing a management report that must include an allocation of overhead. The budgeted overhead for each department and the data for one job are as follows: Using the departmental overhead application rates, and allocating overhead on the basis of direct labor hours, overhead applied to Job 231 in the Tooling Department would be: a. 44.00. b. 197.50. c. 241.50. d. 501.00.
Job order cost sheets show the following costs assigned to each job: The company assigns overhead at $1.25 for each direct labor dollar spent. What is the total cost for each of the jobs?
Freeman Furnishings has summarized its data as shown. Direct labor hours will be used as the activity base to allocate overhead: Compute the cost of goods manufactured.
San Mateo Optics, Inc., specializes in manufacturing lenses for large telescopes and cameras used in space exploration. As the specifications for the lenses are determined by the customer and vary considerably, the company uses a job-order costing system. Manufacturing overhead is applied to jobs on the basis of direct labor hours, utilizing the absorption- or full-costing method. San Mateos predetermined overhead rates for 20x1 and 20x2 were based on the following estimates. Jim Cimino, San Mateos controller, would like to use variable (direct) costing for internal reporting purposes as he believes statements prepared using variable costing are more appropriate for making product decisions. In order to explain the benefits of variable costing to the other members of San Mateos management team, Cimino plans to convert the companys income statement from absorption costing to variable costing. He has gathered the following information for this purpose, along with a copy of San Mateos 20x1 and 20x2 comparative income statement. San Mateo Optics, Inc. Comparative Income Statement For the Years 20x1 and 20x2 San Mateos actual manufacturing data for the two years are as follows: The companys actual inventory balances were as follows: For both years, all administrative expenses were fixed, while a portion of the selling expenses resulting from an 8 percent commission on net sales was variable. San Mateo reports any over-or underapplied overhead as an adjustment to the cost of goods sold. Required: 1. For the year ended December 31, 20x2, prepare the revised income statement for San Mateo Optics, Inc., utilizing the variable-costing method. Be sure to include the contribution margin on the revised income statement. 2. Describe two advantages of using variable costing rather than absorption costing. (CMA adapted)
Carltons Kitchens three cost pools and overhead estimates are as follows: Compare the overhead allocation using: A. The traditional allocation method B. The activity-based costing method (Hint: the traditional method uses machine hours as the allocation base.)
Exotic Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows: The average shop direct labor rate is 37.50 per hour. Determine the predetermined shop overhead rate per direct labor hour.
Activity cost pools, activity rates, and product costs using activity-based costing Caldwell Home Appliances Inc. is estimating the activity cost associated with producing ovens and refrigerators. The indirect labor can be traced into four separate activity pools, based on time records provided by the employees. The budgeted activity cost and activity-base information are provided as follows: The estimated activity-base usage and unit information for two product lines was determined as follows: A. Determine the activity rate for each activity cost pool. B. Determine the activity-based cost per unit of each product.
Overhead costs are assigned to each product based on __________________. A. the proportion of that products use of the cost driver B. a predetermined overhead rate for a single cost driver C. price of the product D. machine hours per product
Geneva, Inc., makes two products, X and Y, that require allocation of indirect manufacturing costs. The following data were compiled by the accountants before making any allocations: The total cost of purchasing and receiving parts used in manufacturing is 60,000. The company uses a job-costing system with a single indirect cost rate. Under this system, allocated costs were 48,000 and 12,000 for X and Y, respectively. If an activity-based system is used, what would be the allocated costs for each product?
Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC: What would be the predetermined rate for each cost pool?
Overhead application rate Roll Tide Manufacturing Inc. uses a job order cost system and standard costs. It manufactures one product, whose standard cost follows: The standards are based on normal capacity of 2,700 direct labor hours. Actual activity for March follows: Required: 1. Compute the variable and fixed factory overhead rates per unit. 2. Compute the variable and fixed overhead rates per direct labor hour. 3. Determine the total fixed factory overhead based on normal capacity.