Question

6. (20 points) Wood Construction, Inc. manufactures and sells chicken coops for $1,000 each. These special coops will provide protection for the chickens from other animals and also allow for the chickens to free range. Each coop requires 2 (26" X 8') sheets of tin, 8 (8foot 2X4) pieces of wood, and 7 yards of 48" chicken wire. Each coop will need a carpenter to frame the structure and assembler to cut the chicken wire and tin, and then assemble the pieces together It takes the carpenter 2.5 hours to frame the coop and lid and one assembler 3 hours to cut the chicken wire and assemble all the parts. The tin costs $20.00 per sheet, wood is $2.97 per piec chicken wire is $5.40 per yard. An untraceable amount of nails will be used. A box of nails is expected to cost $19.96. The carpenter is typically paid $22 per hour and the assembler is paid $25 per hour. This is a smaller sized company with only 1 manager, 2 part-time carpenters, an 1 assembler Wood construction expects to manufacture 400 coops and sells 380 coops for the year. Manufacturing overhead is applied based on direct labor hours. The relevant range is 350 - 4 coops. General ledger shows the following annual costs: Budget Variable Manufacturing Overhead Fixed Manufacturing Overhead Fixed administrative Costs Fixed Warehouse Costs Variable Selling Costs Fixed Selling Costs 12,000 58,000 10,000 17,000 2,000 15,000 a Determine the predetermined fixed manufacturing overhead rate: b. Determine the predetermined variable manufacturing overhead rate:

   What is the answer to this? Thanks for your help. :)

Answer 1

Fixed Manuacturing overhead Rate= 26.36

Variable Manuacturing overhead Rate= 5.45

Driect Materials per unit 2 sheets of tin @20 8 Pieces of wood @2.97 7 Yards of chicken wire @ 5.40 Total direct materials 40 23.76 37.8 101.56 Direct labor per coop Carpender Carpender Assembler Total Direct Labor Hours 2.5 3 5.5 Rate per hour Total 22 55 25 75 130

Fixed Manuacturing overhead Rate=Fixed manufacuring cost/Direct labor hours Fixed Manuacturing overhead 58000 Total Direct hours 5.5*400 2200 Fixed Manuacturing overhead Rate= 26.36 12000 Variable Manuacturing overhead Rate=Variable manufacuring cost/Direct labor hours Variable Manuacturing overhead Total Direct hours 5.5*400 2200 Variable Manuacturing overhead Rate=| 5.45

400 Units 40624 52000 7984 100608 Per unit 101.56 130 19.96 251.52 Cost Sheet for one coop Particulars Direct Materials Direct Wages Consumables Prime Cost Manufacturing overheads: Fixed manufacturing Overhead Variable manufacturing Overhead Works Cost Fixed Administration Costs Cost of production Selling and Distribution costs: Fixed werehouse costs Fixed selling costs Variable selling costs Total Cost per coop 145 30 58000 12000 170608 10000 180608 426.52 25 451.52 17000 15000 2000 214608 42.5 37.5 5 21.46