Hyde Restorations rebuilds factory facilities. It employs 1 3 0 full - time workers at $ 2
Question:
Hyde Restorations rebuilds factory facilities. It employs fulltime workers at $ per hour. Despite operating at capacity, last years performance was a great disappointment to the managers. In total, nine jobs were accepted and completed, incurring the following total costs:
Direct materials $
Direct labor
Manufacturing overhead
Of the $ manufacturing overhead, percent was variable overhead and percent was fixed.
This year, Hyde expects to operate at the same activity level as last year, and overhead costs and the wage rate are not expected to change. For the first quarter of this year, Hyde Restorations completed two jobs and was beginning the third Job The costs incurred follow:
Direct Materials Direct Labor
Job $ $
Job
Job
Total manufacturing overhead
Total marketing and administrative costs
You are a consultant associated with Conway & Company, which has been hired by Hyde to analyze the profitability issue. The managing partner on the engagement has reviewed the accounts at Hyde and suggests you start by classifying the overhead into fixed and variable components for each of the jobs. With the help of the Hyde supervisors on each of the jobs, you arrive at the following split.
Actual Manufacturing Overhead
Variable Fixed
Job $ $
Job $ $
Job $ $
$ $
In the first quarter of this year, percent of marketing and administrative cost was variable and percent was fixed. You are told that Jobs and were sold for $ and $ respectively. All over or underapplied overhead for the quarter is written off to Cost of Goods Sold.
Required:
APresent in Taccounts the actual manufacturing cost flows for the three jobs in the first quarter of this year.
BUsing last year's overhead costs and direct laborhours as this year's estimate, calculate predetermined overhead rates per direct laborhour for variable and fixed overhead.
CPresent in Taccounts the normal manufacturing cost flows for the three jobs in the first quarter of this year. Use the overhead rates derived in requirement b
D Check my workCalculate operating profit loss for the first quarter of this year under actual and normal costing systems.
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher