Homework Answers
a)
Estimated annual fixed production overheads = $500,000
Estimated annual volume of activity = 100,000 direct labor hours
Overhead absorption rate for fixed production overheads = Estimated annual fixed production overheads/Estimated annual volume of activity
= 500,000/100,000
= $5 per direct labor hour
b)
Actual direct labor hours = 100,000
Actual fixed production overheads = $525,000
Absorbed production overheads = Actual direct labor hours x Overhead absorption rate
= 100,000 x 5
= $500,000
Since Absorbed production overheads were less than Actual fixed production overheads, hence fixed production overheads were under absorbed.
Amount of under absorption = Actual fixed production overheads - Absorbed production overheads
= $525,000 - $500,000
= $25,000
Unless COGS is adjusted, profit will be overstated by that amount i.e. $25,000
c)
Actual direct labor hours = 112,000
Actual fixed production overheads = $500,000
Absorbed production overheads = Actual direct labor hours x Overhead absorption rate
= 112,000 x 5
= $560,000
The amount of fixed overheads allocated to production was = $560,000
Unless COGS is adjusted, profit will be understated by that amount i.e. $60,000
Please ask if you have any query related to the question. Thank you
Add Answer to:
Exercise #1. Donald's Ducks Estimated annual fixed production overheads Estimated annual volume of activity $500,000 100,000...
Calculating the Predetermined Overhead Rate, Applying Overhead to Production, Reconciling Overhead at the end of the...
Calculating the Predetermined Overhead Rate, Applying Overhead to Production, Reconciling Overhead at the end of the Year, Adjusting Cost of Goods Sold for Under- and Overapplied Overhead At the beginning of the year, Han Company estimated the following: Overhead $160,000 Direct labor hours 80,000 Han uses normal costing and applies overhead on the basis of direct labor hours. For the month of January, direct labor hours were 8,450. By the end of the year, Han showed the following actual amounts:...
Sheridan Company estimates that annual manufacturing overhead costs will be $902,000. Estimated annual operating activity bases...
Sheridan Company estimates that annual manufacturing overhead costs will be $902,000. Estimated annual operating activity bases are direct labor cost $400,000, direct labor hours 40,000, and machine hours 100,000. Compute the predetermined overhead rate for each activity base. (Round answers to 2 decimal places, eg. 10.50) Overhead rate per direct labor cost Overhead rate per direct labor hour $ Overhead rate per machine hour Coronado Company uses a job order cost system and applies overhead to production on the basis...
6-Estimated data for Lorien Company for Year 1 are as follows: Direct materials to be purchased.........................................................
6-Estimated data for Lorien Company for Year 1 are as follows: Direct materials to be purchased...................................................... $35,000 Indirect labor.......................................................................................... 10,000 Wages of janitors in corporate office building................................. 47,000 Factory building rent............................................................................. 60,000 Depreciation on production equipment............................................. 20,000 Administrative office supplies............................................................. 25,000 Estimated direct labor hours: 40,000 hours Actual data for Year 1 are as follows: Total manufacturing overhead: $110,000 Direct labor hours: 35,000 hours The predetermined manufacturing overhead rate is determined on the basis of direct labor hours. Which ONE...
Chic Design allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the...
Chic Design allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results for the production of 2,000 flower pots: 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Direct materials ............... . Purchased 27,900 pounds at a cost of $3.40 per pound; Used 27,400 pounds to produce 2,000 pots Direct labor Worked...
Apple Valley Corporation uses a job cost system and has two production departments A and B....
Apple Valley Corporation uses a job cost system and has two production departments A and B. Budgeted manufacturing costs for the year are: Department A Department B Direct materials $900.000 $200,000 Direct manufacturing labor $400,000 $100,000 Manufacturing overhead $800,000 5500,000 The actual material and labor costs charged to Job #432 were as follows: Total Direct materials $26,000 Direct labor Department A $12,000 honarmant CA O A. $10,000 OB. 564,000 C. 516,000 OD. 596,000 Manufacturing overhead $800,000 $500,000 The actual material...
1. Sarratt Corporation's contribution margin ratio is 77% and its fixed monthly expenses are $46,000. Assume...
1. Sarratt Corporation's contribution margin ratio is 77% and its fixed monthly expenses are $46,000. Assume that the company's sales for May are expected to be $105,000. Required: Estimate the company's net operating income for May, assuming that the fixed monthly expenses do not change. 2. In activity-based costing, the activity rate for an activity cost pool is computed by dividing the total overhead cost in the activity cost pool by: the total direct labor-hours for the activity cost pool....
I need help with finding what formulas to use and how to solve these two questions. 1. What is the direct labor rate variance? 2. What is the fixed overhead volume variance amount? The given: Martin C...
I need help with finding what formulas to use and how to solve these two questions. 1. What is the direct labor rate variance? 2. What is the fixed overhead volume variance amount? The given: Martin Co. gathered the following actual results for the current month: Actual Units produced 3,000 Direct materials purchased and used (5,400 lbs.) $21,600 Direct labor cost (4,600 hours actual) $36,800 Manufacturing overhead costs incurred: $37,650 [=Variable $16,250 and Fixed $21,400] Machine hours (610 hours actual)...
Performance Report Based on Actual Production Palladium Inc. produces a variety of household cleaning products. Palladium's...
Performance Report Based on Actual Production Palladium Inc. produces a variety of household cleaning products. Palladium's controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per Direct Labor Hour Maintenance $ 86,000 $0.20 Power 0.45 Indirect labor 140,000 2.10 Rent 35,000 Next year, Palladium expects production to require 90,000 direct labor hours. Assume that actual production required 98,000 direct labor hours at standard. The actual overhead costs incurred were as follows:...
Exercise 11-12 (Video) Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard...
Exercise 11-12 (Video) Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 100,000 units per year. The total budgeted overhead at normal capacity is $500,000 comprised of $200,000 of variable costs and $300,000 of fixed costs. Byrd applies overhead on the basis of direct labor hours. During the current year, Byrd...
Problem 1 (25 points). Versailles Company produces a product that relies on a standard cost system...
Problem 1 (25 points). Versailles Company produces a product that relies on a standard cost system for planning and control. The following are the standards for producing one unit of product VERSAILLES COMPANY STANDARDS FOR PRODUCTION OF ONE UNIT OF PRODUCT Standard Standard Standard Quantity of Price Cost Input of Input Per Unit Direct Materials 3 units 12.00 $ 36.00 Direct Labor 1.0 hours 10.00 10.00 Variable Manufacturing Overhead 1.0 hours 6.00 6.00 Fixed Manufacturing Overhead 1.0 hours 18.00 18.00...
Calculating the Predetermined Overhead Rate, Applying Overhead to Production, Reconciling Overhead at the end of the Year, Adjusting Cost of Goods Sold for Under- and Overapplied Overhead At the beginning of the year, Han Company estimated the following: Overhead $160,000 Direct labor hours 80,000 Han uses normal costing and applies overhead on the basis of direct labor hours. For the month of January, direct labor hours were 8,450. By the end of the year, Han showed the following actual amounts:...
Sheridan Company estimates that annual manufacturing overhead costs will be $902,000. Estimated annual operating activity bases are direct labor cost $400,000, direct labor hours 40,000, and machine hours 100,000. Compute the predetermined overhead rate for each activity base. (Round answers to 2 decimal places, eg. 10.50) Overhead rate per direct labor cost Overhead rate per direct labor hour $ Overhead rate per machine hour Coronado Company uses a job order cost system and applies overhead to production on the basis...
Chic Design allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results for the production of 2,000 flower pots: 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Direct materials ............... . Purchased 27,900 pounds at a cost of $3.40 per pound; Used 27,400 pounds to produce 2,000 pots Direct labor Worked...
Apple Valley Corporation uses a job cost system and has two production departments A and B. Budgeted manufacturing costs for the year are: Department A Department B Direct materials $900.000 $200,000 Direct manufacturing labor $400,000 $100,000 Manufacturing overhead $800,000 5500,000 The actual material and labor costs charged to Job #432 were as follows: Total Direct materials $26,000 Direct labor Department A $12,000 honarmant CA O A. $10,000 OB. 564,000 C. 516,000 OD. 596,000 Manufacturing overhead $800,000 $500,000 The actual material...
Exercise 11-12 (Video) Byrd Company produces one product, a putter called GO-Putter. Byrd uses a standard cost system and determines that it should take one hour of direct labor to produce one GO-Putter. The normal production capacity for this putter is 100,000 units per year. The total budgeted overhead at normal capacity is $500,000 comprised of $200,000 of variable costs and $300,000 of fixed costs. Byrd applies overhead on the basis of direct labor hours. During the current year, Byrd...
Problem 1 (25 points). Versailles Company produces a product that relies on a standard cost system for planning and control. The following are the standards for producing one unit of product VERSAILLES COMPANY STANDARDS FOR PRODUCTION OF ONE UNIT OF PRODUCT Standard Standard Standard Quantity of Price Cost Input of Input Per Unit Direct Materials 3 units 12.00 $ 36.00 Direct Labor 1.0 hours 10.00 10.00 Variable Manufacturing Overhead 1.0 hours 6.00 6.00 Fixed Manufacturing Overhead 1.0 hours 18.00 18.00...
Most questions answered within 3 hours.
-
Week 8 forum SPHE461
The field of the Fitness Professional includes many
different titles, specialties, certifying...
asked 3 minutes ago -
1. In the short run, the marginal product of labor increases
then decreases because of what?...
asked 51 minutes ago -
A farmer wants to compare the tastiness and juiciness of
tomatoes grown with three amounts of...
asked 1 hour ago -
What is facilitated diffusion and how does it differ from
symport and antiport transportation? How do...
asked 2 hours ago -
if a firm producing 100 units at $5.00 each experience
an 80% experience curve, what will...
asked 2 hours ago -
A solid, uniform disk of radius 0.250 m and mass 53.7 kg rolls
down a ramp...
asked 5 hours ago -
Given the following table of high speed internet access vs.
annual home income:
Home Income
%...
asked 5 hours ago -
A baseball batter hits a 0.145kg baseball straight up into the
air. The baseball leaves the...
asked 6 hours ago -
An FM modulator is tested using
single-tone baseband signal with frequency of 50kHz and a sprectrum...
asked 6 hours ago -
Write the ionic equations for the first stage of salts
hydrolysis.
Anion, Cation?
Na2S
NiSO4
K2SO4...
asked 8 hours ago -
suppose there is a normally distributed population with a mean of
250 and a standard deviation...
asked 8 hours ago -
Question Three
Suppose you as project manager are using the Waterfall
development methodology on a large...
asked 9 hours ago