Lansing, Inc., provided the following data for its two producing departments: Estimated overhead Molding $375,000 Polishing...
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Lansing, Inc., provided the following data for its two producing departments: Estimated overhead Molding $375,000 Polishing Total $60,000 $435,000 Direct labor hours (expected and actual): Form A 1,000 5,000 6,000 Form B 4,000 15,000 19,000 Total 5,000 20,000 25,000 Machine hours: Form A Form B Total 3,400 3,000 6,400 1,600 2,000 3,600 5,000 5,000 10,000 Machine hours are used to assign the overhead of the Molding Department, and direct labor hours are used to assign the overhead of the Polishing Department. There are 20,000 units of Form A produced and sold and 50,000 of Form B. Required: 1. Calculate the overhead rates for each department. Molding 75 per machine hour Polishing $ 3 per direct labor hour 2. Using departmental rates, assign overhead to the two products and calculate the overhead cost per unit. Round your answers to the nearest cent. Assigned unit overhead cost for Form A Assigned unit overhead cost for Form B Unit Overhead Cost per unit 2x per unit How does this compare with the plantwide rate unit cost, using direct labor hours? Relative to the plantwide rate, the cost increased for Form A and decreased for Form B. 3. What if the machine hours in Molding were 1,200 for Form A and 3,800 for Form B and the direct labor hours used in Polishing were 5,000 and 15,000, respectively? Calculate the overhead cost per unit for each product using departmental rates. Round your answers to the nearest cent. Unit Overhead Cost Form A Form B 3.6 X per unit per unit Compare with the plantwide rate unit costs calculated in Requirement 2. What can you conclude from this outcome? Relative to the plantwide rate, the cost increased for Form A and decreased for Form B. Lansing, Inc., provided the following data for its two producing departments: Estimated overhead Molding $375,000 Polishing Total $60,000 $435,000 Direct labor hours (expected and actual): Form A 1,000 5,000 6,000 Form B 4,000 15,000 19,000 Total 5,000 20,000 25,000 Machine hours: Form A Form B Total 3,400 3,000 6,400 1,600 2,000 3,600 5,000 5,000 10,000 Machine hours are used to assign the overhead of the Molding Department, and direct labor hours are used to assign the overhead of the Polishing Department. There are 20,000 units of Form A produced and sold and 50,000 of Form B. Required: 1. Calculate the overhead rates for each department. Molding 75 per machine hour Polishing $ 3 per direct labor hour 2. Using departmental rates, assign overhead to the two products and calculate the overhead cost per unit. Round your answers to the nearest cent. Assigned unit overhead cost for Form A Assigned unit overhead cost for Form B Unit Overhead Cost per unit 2x per unit How does this compare with the plantwide rate unit cost, using direct labor hours? Relative to the plantwide rate, the cost increased for Form A and decreased for Form B. 3. What if the machine hours in Molding were 1,200 for Form A and 3,800 for Form B and the direct labor hours used in Polishing were 5,000 and 15,000, respectively? Calculate the overhead cost per unit for each product using departmental rates. Round your answers to the nearest cent. Unit Overhead Cost Form A Form B 3.6 X per unit per unit Compare with the plantwide rate unit costs calculated in Requirement 2. What can you conclude from this outcome? Relative to the plantwide rate, the cost increased for Form A and decreased for Form B.
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Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
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