Mr. Suncat is trying to determine if he should use a job order costing system or...

 

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Mr. Suncat is trying to determine if he should use a job order costing system or an activity-based costing system to better determine the cost of each of his products. He has provided you with the following information and has requested that you help him by answering these questions/calculating these amounts. Multi-Layer Custom $50 7 hours 1000 $50/hour Basic $20 3 hours $35 5 hours 1700 1500 $50/hour $50/hour Direct Material Costs per wedding cake type Direct Labor Hours per wedding cake type Number of cakes expected to be produced by wedding cake type Direct Labor Costs per hour per wedding cake type Total estimated manufacturing overhead cost is $150,000. a. Define and explain the purpose of a predetermined overhead rate that is applied in a job-order costing system. b. Using the information given above, compute the predetermined manufacturing overhead rate based on total direct labor hours for Suncat Cake Shop. Show all calculations and clearly label your answer. c. Using job-order costing, compute the total manufacturing overhead cost that is expected to be allocated to each product. Show all calculations and clearly label your answer. 1. Basic Wedding Cake 2. Multi-layer Wedding Cake 3. Custom Wedding Cake Mr. Suncat is trying to determine if he should use a job order costing system or an activity-based costing system to better determine the cost of each of his products. He has provided you with the following information and has requested that you help him by answering these questions/calculating these amounts. Multi-Layer Custom $50 7 hours 1000 $50/hour Basic $20 3 hours $35 5 hours 1700 1500 $50/hour $50/hour Direct Material Costs per wedding cake type Direct Labor Hours per wedding cake type Number of cakes expected to be produced by wedding cake type Direct Labor Costs per hour per wedding cake type Total estimated manufacturing overhead cost is $150,000. a. Define and explain the purpose of a predetermined overhead rate that is applied in a job-order costing system. b. Using the information given above, compute the predetermined manufacturing overhead rate based on total direct labor hours for Suncat Cake Shop. Show all calculations and clearly label your answer. c. Using job-order costing, compute the total manufacturing overhead cost that is expected to be allocated to each product. Show all calculations and clearly label your answer. 1. Basic Wedding Cake 2. Multi-layer Wedding Cake 3. Custom Wedding Cake

Answer rating: 100% (QA)

a A predetermined overhead rate is a rate used to allocate manufacturing overhead costs to products ... View the full answer