Company A has received an order of project X which requires direct materials for 500 units...
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Company A has received an order of project X which requires direct materials for 500 units ($20 per unit) and use indirect materials #300. Project X also requires 4 workers doing the job for 4 days (6 hours a day and cost as $30 per hour). This period, the company estimates to have all OH cost as $300,000 and direct labor hours as 7.500 hours. However, at the end of the period, the company finds that it has actual OH cost and direct labor hours as $350,000 and 10,000 hours. 1) How does the project X cost by using normal costing? (6 points) 2) Does the company over or underapply for the project X and how much? (4 points) Company A has received an order of project X which requires direct materials for 500 units ($20 per unit) and use indirect materials #300. Project X also requires 4 workers doing the job for 4 days (6 hours a day and cost as $30 per hour). This period, the company estimates to have all OH cost as $300,000 and direct labor hours as 7.500 hours. However, at the end of the period, the company finds that it has actual OH cost and direct labor hours as $350,000 and 10,000 hours. 1) How does the project X cost by using normal costing? (6 points) 2) Does the company over or underapply for the project X and how much? (4 points)
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1Calculation of cost of project X by using normal costing method calculation of overhead rate Budget... View the full answer
Related Book For
Operations Management Creating Value Along the Supply Chain
ISBN: 978-0470525906
7th Edition
Authors: Roberta S. Russell, Bernard W. Taylor
Posted Date:
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