Calculating Manufacturing Overhead Rates Windsor Company, accumulated the following data for 2017: Milling Department manufacturing overhead...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Calculating Manufacturing Overhead Rates Windsor Company, accumulated the following data for 2017: Milling Department manufacturing overhead $187,200 Finishing Department manufacturing overhead $76,800 Machine hours used Milling Department Finishing Department Labor hours used Milling Department Finishing Department 9,000 hours 2,000 hours 1,000 hours 1,000 hours In the Milling department, grooves are cut into aluminum and steel rods using computer-controlled equipment. In the Finishing department, the rods are individually cleaned and polished. a. Calculate the plantwide manufacturing overhead rate using machine hours as the allocation base. $ 24 per machine hour b. Calculate the plantwide manufacturing overhead rate using direct labor hours as the allocation base. $ 132 per direct labor hour c. Calculate department overhead rates using machine hours in Milling and direct labor hours in Finishing as the allocation bases. 18.72 Xper Milling Dept. machine hour $ $ 7.68 per Finishing Dept. direct labor hour d. Calculate department overhead rates using direct labor hours in Milling and machine hours in Finishing as the allocation bases. $ 62.4 per Milling Dept. direct labor hour $ 25.6 * per Finishing Dept. machine hour Traditional Product Costing versus Activity-Based Costing Assume that Panasonic Company has determined its estimated total manufacturing overhead cost for one of its plants to be $318,200 consisting of the following activity cost pools for the current month: Activity Centers Activity Costs Assembly setups Cost Drivers $66,000 Setup hours Activity Level 2,000 Materials handling Assembly Maintenance 32,400 Number of moves 180,000 Assembly hours 600 Total 39,800 Maintenance hours $318,200 18,000 1,990 Total direct labor hours used during the month were 14,800. Panasonic produces many different electronic products, including the following two products produced during the current month: Model X301 Model Z205 Units produced Direct materials costs 1,500 1,500 $22,000 $22,000 Direct labor costs $17,000 $17,000 Direct labor hours Setup hours 700 700 60 120 Materials moves 30 60 Assembly hours 900 900 Maintenance hours 20 80 Required a. Calculate the total per-unit cost of each model using direct labor hours to assign manufacturing overhead to products. Round answers for unit cost to two decimal places, if applicable. Direct materials $ X301 39,000 x $ Z205 39,000 x Direct labor 36,500 x 36,500 x Overhead 15,750 x 15,750 x Total cost $ 91,250 x $ 91,250 x Units 1,000 x 1,000 x Unit cost $ 91.25 x $ 91.25 x b. Calculate the total per-unit cost of each model using activity-based costing to assign manufacturing overhead to products. Round answers for unit cost to two decimal places, if applicable. Total direct materials costs $ Total direct labor costs X301 Z205 39,000 x $ 39,000 x 36,500 x 36,500 x Overhead costs: Assembly setup 2,300 x 4,600 x Materials handling 3,250 x 6,500 x Assembly Maintenance 8,000 x 8,000 * 200 x 800 x Total costs $ 89,250 x $ 95,400 x Units produced 1,000 x 1,000 * Unit cost $ 89.25 * $ 95.4 x Activities and Cost Drivers For each of the following activities, select the most appropriate cost driver. Each cost driver may be used only once. 1. Pay vendors 2. Evaluate vendors 3. Inspect raw materials Activity 4. Plan for purchases of raw materials 5. Packaging 6. Supervision Cost Driver i. Number of checks issued a. Number of different kinds of raw materials h. Number of vendors g. Number of moves j. Number of customer orders d. Number of employees x x x x x b. Number of classes offered f. Number of units of raw materials received e. Number of operating hours 10. Move in-process product from one work station to the next c. Number of tables 7. Employee training 8. Clean tables 9. Machine maintenance x x Calculating Manufacturing Overhead Rates Windsor Company, accumulated the following data for 2017: Milling Department manufacturing overhead $187,200 Finishing Department manufacturing overhead $76,800 Machine hours used Milling Department Finishing Department Labor hours used Milling Department Finishing Department 9,000 hours 2,000 hours 1,000 hours 1,000 hours In the Milling department, grooves are cut into aluminum and steel rods using computer-controlled equipment. In the Finishing department, the rods are individually cleaned and polished. a. Calculate the plantwide manufacturing overhead rate using machine hours as the allocation base. $ 24 per machine hour b. Calculate the plantwide manufacturing overhead rate using direct labor hours as the allocation base. $ 132 per direct labor hour c. Calculate department overhead rates using machine hours in Milling and direct labor hours in Finishing as the allocation bases. 18.72 Xper Milling Dept. machine hour $ $ 7.68 per Finishing Dept. direct labor hour d. Calculate department overhead rates using direct labor hours in Milling and machine hours in Finishing as the allocation bases. $ 62.4 per Milling Dept. direct labor hour $ 25.6 * per Finishing Dept. machine hour Traditional Product Costing versus Activity-Based Costing Assume that Panasonic Company has determined its estimated total manufacturing overhead cost for one of its plants to be $318,200 consisting of the following activity cost pools for the current month: Activity Centers Activity Costs Assembly setups Cost Drivers $66,000 Setup hours Activity Level 2,000 Materials handling Assembly Maintenance 32,400 Number of moves 180,000 Assembly hours 600 Total 39,800 Maintenance hours $318,200 18,000 1,990 Total direct labor hours used during the month were 14,800. Panasonic produces many different electronic products, including the following two products produced during the current month: Model X301 Model Z205 Units produced Direct materials costs 1,500 1,500 $22,000 $22,000 Direct labor costs $17,000 $17,000 Direct labor hours Setup hours 700 700 60 120 Materials moves 30 60 Assembly hours 900 900 Maintenance hours 20 80 Required a. Calculate the total per-unit cost of each model using direct labor hours to assign manufacturing overhead to products. Round answers for unit cost to two decimal places, if applicable. Direct materials $ X301 39,000 x $ Z205 39,000 x Direct labor 36,500 x 36,500 x Overhead 15,750 x 15,750 x Total cost $ 91,250 x $ 91,250 x Units 1,000 x 1,000 x Unit cost $ 91.25 x $ 91.25 x b. Calculate the total per-unit cost of each model using activity-based costing to assign manufacturing overhead to products. Round answers for unit cost to two decimal places, if applicable. Total direct materials costs $ Total direct labor costs X301 Z205 39,000 x $ 39,000 x 36,500 x 36,500 x Overhead costs: Assembly setup 2,300 x 4,600 x Materials handling 3,250 x 6,500 x Assembly Maintenance 8,000 x 8,000 * 200 x 800 x Total costs $ 89,250 x $ 95,400 x Units produced 1,000 x 1,000 * Unit cost $ 89.25 * $ 95.4 x Activities and Cost Drivers For each of the following activities, select the most appropriate cost driver. Each cost driver may be used only once. 1. Pay vendors 2. Evaluate vendors 3. Inspect raw materials Activity 4. Plan for purchases of raw materials 5. Packaging 6. Supervision Cost Driver i. Number of checks issued a. Number of different kinds of raw materials h. Number of vendors g. Number of moves j. Number of customer orders d. Number of employees x x x x x b. Number of classes offered f. Number of units of raw materials received e. Number of operating hours 10. Move in-process product from one work station to the next c. Number of tables 7. Employee training 8. Clean tables 9. Machine maintenance x x
Expert Answer:
Related Book For
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan
Posted Date:
Students also viewed these accounting questions
-
The Finer furniture company produces expensive desks for executives. The wood for the desks are cut into standard sizes and the desks are assembled in the Construction and Assembly (C&A) dept. The...
-
Beauville Furniture Corporation produces sofas, recliners, and lounge chairs. Beauville is located in a medium-sized community in the southeastern part of the United States. It is a major employer in...
-
On the cost of goods manufactured schedule, depreciation onfactory equipment... A. is not listed because it is not a product cost. B. is not an inventoriable cost. C. is not listed because it is...
-
Is there an unbranched alkane containing 23 hydrogen atoms? If so, give its structural formula; if not, explain why not.
-
Friedman contends that a necessary trade-off exists between corporate social responsibilities and corporate profits. Provide an argument against this view.
-
(a) Explain how treating the electric field lines between two oppositely charged objects as elastic bands can help you to understand what happens to the electric potential energy of the system when...
-
Delby Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections to be assembled on customers lots. Delby expanded into the precut housing market when...
-
1. In figure, two identical particles each of mass m are tied together with an inextensible string. This is pulled at its centre with a constant force F. If the whole system lies on a smooth...
-
On January 1, 2017, P purchased 80% of the common stock of S for $80,000. S had common stock of $80,000 and retained earnings of $12,000 at that time. On December 31, 2021, the trial balances of the...
-
Identify a successful entrepreneur that you admire and respect. (It can be someone that is nationally prominent or someone you know personally, such as a family member or a friend.) Briefly describe...
-
You observe a portfolio for five years and determine that its average return is 12.4% and the standard deviation of its returns is 19.6%. Can you be 95% confident that this portfolio will not lose...
-
Alvarado Apps, Inc. owned real and tangible personal property valued at $3,000,000 at the beginning of the year and $3,400,000 at the end of the year. It also leased real property for $100,000. In...
-
Ethylene (C2H4) at 100C and 1 bar passes through a heater and emerges at 200C. Calculate the change in exthalpy per mole of ethylene that passes through. You may assume ideal gas behavior. The...
-
Burgess Fabricators, Inc. did business in and is subject to the tax of State 1 and State 2, where it had its commercial domicile. It had the following nonbusiness income for the year: $15,000 in net...
-
What are the steps required to implement a firms human rights responsibilities?
-
How is use of the word consistent helpful in fraud reports?
-
Solve the Gross-Pitaevskii equation and evaluate the mean field energy, see equations (11.2.21) and (11.2.23), for a uniform Bose gas to show that this method yields precisely equation (11.2.6).
-
Solve the Gross-Pitaevskii equation and evaluate the mean field energy, see equations (11.2.21) and (11.2.23), for an isotropic harmonic oscillator trap with frequency \(\omega_{0}\) for the case \(N...
-
Assume that in the virial expansion \[\begin{equation*}\frac{P v}{k T}=1-\sum_{j=1}^{\infty} \frac{j}{j+1} \beta_{j}\left(\frac{\lambda^{3}}{v} ight)^{j} \tag{10.4.22}\end{equation*}\] where...
Study smarter with the SolutionInn App