Edgeworth Box Corporation manufactures a variety of special packaging boxes used in the pharmaceutical industry. The...

 

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Edgeworth Box Corporation manufactures a variety of special packaging boxes used in the pharmaceutical industry. The company's Dallas plant is semiautomated, but the special nature of the boxes requires some manual labor. The controller has chosen the following activity cost pools, cost drivers, and pool rates for the Dallas plant's product-costing system. Budgeted Level for Cost Driver Activity Cost Pool Overhead Cost Cost Driver Pool Rate Purchasing, storage, and material handing Engineering and produd design Machine sebp costa Machine depreciution and maintenance Factory deprecialion, ls, Insuranca, and utiliies Oher manufacturing-overhead costs $ 200,000 Rar-material casts $1,000,.000 20% of matarial cost 100,000 70,000 Hours in dasign department Production nuns 5,000 hrs 1,000 nuns $20 per hour 370 per run 140 12 300,000 Machine heurs 100.000 hrs $3 per hour 200,000 Machine hours 100,000 hrs. $2 per hour 150,000 Machine hours 100,000 hes $1. 50 per hour 36 Total $1,020.000 8476 Two recent production orders had the following requirements. O42 20,000 Units of Box C52 10,000 Units of Box W29 42 h O S40,000 Direct-luber hours 21 hr. $36,000 Raw-material cost Hours in dasign departmont Production nns 10 25 4 Machine hours (24 20 Required: 1. Compute the total overhead that should be assigned to each of the two production orders C52 anc W29. Compute the overhead cost per box in each order. Suppose the Dallas plant were to use a single predetermined overhead rate based on direct-labor hours. The direct-labor budget calls for4,000 hous. Compute the predetermined overhead rate per direct-labor hour. Compute the total overhead cost that would be assigned to the order for box C52 and the order for box W29. Compute the overhead cost per box in each order. (255) Why do the two product-costing systems yield such widely differing overhead costs per box? C. Edgeworth Box Corporation manufactures a variety of special packaging boxes used in the pharmaceutical industry. The company's Dallas plant is semiautomated, but the special nature of the boxes requires some manual labor. The controller has chosen the following activity cost pools, cost drivers, and pool rates for the Dallas plant's product-costing system. Budgeted Level for Cost Driver Activity Cost Pool Overhead Cost Cost Driver Pool Rate Purchasing, storage, and material handing Engineering and produd design Machine sebp costa Machine depreciution and maintenance Factory deprecialion, ls, Insuranca, and utiliies Oher manufacturing-overhead costs $ 200,000 Rar-material casts $1,000,.000 20% of matarial cost 100,000 70,000 Hours in dasign department Production nuns 5,000 hrs 1,000 nuns $20 per hour 370 per run 140 12 300,000 Machine heurs 100.000 hrs $3 per hour 200,000 Machine hours 100,000 hrs. $2 per hour 150,000 Machine hours 100,000 hes $1. 50 per hour 36 Total $1,020.000 8476 Two recent production orders had the following requirements. O42 20,000 Units of Box C52 10,000 Units of Box W29 42 h O S40,000 Direct-luber hours 21 hr. $36,000 Raw-material cost Hours in dasign departmont Production nns 10 25 4 Machine hours (24 20 Required: 1. Compute the total overhead that should be assigned to each of the two production orders C52 anc W29. Compute the overhead cost per box in each order. Suppose the Dallas plant were to use a single predetermined overhead rate based on direct-labor hours. The direct-labor budget calls for4,000 hous. Compute the predetermined overhead rate per direct-labor hour. Compute the total overhead cost that would be assigned to the order for box C52 and the order for box W29. Compute the overhead cost per box in each order. (255) Why do the two product-costing systems yield such widely differing overhead costs per box? C.

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1 Total Overhead Cost Amt in C52 Working20000 C52 Units W29 Working100 Units W29 Working10000 Units ... View the full answer