Question

How did they get Indirect Cost Allocated? I need to see the calculations and/or formula. Thank you!

(%) T15-1 (similar to) Question Help Cornell Metal Works produces two types of metal lamps. Cornell manufactures 24,000 basic lamps and 4,500 designer lamps. Its simple costing system uses a single indirect-cost pool and allocates costs to the two lamps on the basis of direct manufacturing labor-hours. It provides the following budgeted cost information EE (Click the icon to view the information.) Calculate the total budgeted costs of the basic and designer lamps using Cornell's simple costing system 293,250 12,750 -$ 23 per manufacturing labor-hour Now calculate the total budgeted costs and per unit costs of the decimal places.) Data Table Basic lamps Total Per unit Total Basic Lamps 15 0.4 hours 20 Designer Lamps 15.00 8.00 23.00 9.20 32.20 $ 360,000 $ Direct materials Direct manufacturing labor Total direct costs Indirect costs allocated Total costs Direct materials per lamp Direct manufacturing labor per lamp Direct manufacturing labor rate per hour $ Indirect manufacturing costs 17 192,000 552,000 220,800 0.7 hours 20 $ 293,250 $772,800 $ Print Done Enter any number in the edit fields and then click Check An Clear All Check Answer remaining

Answer 1

Solution:

Particulars	Basic Lamps		Designer Lamps
	Total	Per unit	Total	Per unit
Number of lamps(units)	24000		4500
Direct Materials per unit		15		17
Direct Materials =(No of lamps* Direct material per unit)	360000		76500
Direct manufacturing labor hour per lamp	0.4 hours		0.7 hours
Direct manufacturing labor rate per hour		20		20
Total Direct manufacturing labor=(Labor hour* Labor rate * Number of lamps)	192000		63000

Calculation of allocation of Indirect Cost
Total Indirect cost is $293250
Allocation is to be made on the basis of Direct manufactruing labor hours
Particulars	Basic Lamps		Designer Lamps
	Calculation	Amount ($)	Calculation	Amount ($)
Direct manufacturing labor hour per lamp		0.4 hours		0.7 hours
Number of lamps(units)		24000		4500
Total number of Hours		9600		3150
Allocation of Indirect Cost of $293250 in the ratio of Direct labor hours =(9600:3150)	(293250*9600)/(9600+3150)	220800	(293250*3150)/(9600+3150)	72450