Platinum Web Services designs and maintains websites for small business entrepreneurs. Competition has been intensifying in...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Platinum Web Services designs and maintains websites for small business entrepreneurs. Competition has been intensifying in recent years and the company is losing business to larger web design firms. Summary data concerning the last two years of operations follow: Estimated hours of service demanded Estimated overhead cost Actual hours of servire provided Actual overhead cost incurred Hours of service available at capacity Last Year 1,000 This Year 800 $ 160,000 750 $ 160,000 1,600 $ 160,000 500 $ 160,000 1,600 The company applies its overhead costs to jobs using the hours of service provided as the allocation base. For example, this year and last year, 40 service-hours were required to maintain the website for a small company called Verde Consulting. All of Platinum's overhead costs are fixed, and the actual overhead cost incurred was exactly as estimated at the beginning of the year in last year and this year. Required: 1. Platinum Web Services computes its predetermined overhead rate at the beginning of each year based on the estimated overhead cost and the estimated hours of service demanded for the year. Using this approach, how much overhead would have been applied to the Verde Consulting job last year? How about this year? 2. The president of Platinum Web Services heard some companies in the industry changed to a system of computing the predetermined overhead rate based on the hours of service available at capacity. He would like to know what effect this method would have on job costs. How much overhead cost would have been applied to the Verde Consulting job last year using this method? How much would have been applied this year? 3. If Platinum computes its predetermined overhead rate based on the hours of service available at capacity as in Requirement 2, how much unused capacity cost would the company have incurred last year? This year? Complete this question by entering your answers in the tabs below. Prev 2 of 2 Next Platinum Web Services designs and maintains websites for small business entrepreneurs. Competition has been intensifying in recent years and the company is losing business to larger web design firms. Summary data concerning the last two years of operations follow: Estimated hours of service demanded Estimated overhead cost Actual hours of servire provided Actual overhead cost incurred Hours of service available at capacity Last Year 1,000 This Year 800 $ 160,000 750 $ 160,000 1,600 $ 160,000 500 $ 160,000 1,600 The company applies its overhead costs to jobs using the hours of service provided as the allocation base. For example, this year and last year, 40 service-hours were required to maintain the website for a small company called Verde Consulting. All of Platinum's overhead costs are fixed, and the actual overhead cost incurred was exactly as estimated at the beginning of the year in last year and this year. Required: 1. Platinum Web Services computes its predetermined overhead rate at the beginning of each year based on the estimated overhead cost and the estimated hours of service demanded for the year. Using this approach, how much overhead would have been applied to the Verde Consulting job last year? How about this year? 2. The president of Platinum Web Services heard some companies in the industry changed to a system of computing the predetermined overhead rate based on the hours of service available at capacity. He would like to know what effect this method would have on job costs. How much overhead cost would have been applied to the Verde Consulting job last year using this method? How much would have been applied this year? 3. If Platinum computes its predetermined overhead rate based on the hours of service available at capacity as in Requirement 2, how much unused capacity cost would the company have incurred last year? This year? Complete this question by entering your answers in the tabs below. Prev 2 of 2 Next
Expert Answer:
Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
Suppose that you are the CEO of Fly-a-Kite Company, which manufactures a variety of kite kits. Lily, the assistant accountant of your Company, has prepared a variance analysis report for product...
-
Platinum Web Services designs and maintains websites for small business entrepreneurs. Competition has been intensifying in recent years and the company has been losing business to larger web design...
-
1. Draw a flow chart for the following process You are approaching a local bank for getting an educational loan and draw a flow chart with all the process in detail and the decision node that you can...
-
Prove that is differentiable on (-3, 3) and for 0 (x- E)
-
Solve the following least-squares problem: 1 1 (C)-(0) 1 Show how you arrived at the normal equation. Once there, you can just report the solution of the linear system.
-
Freelance reporter Irwin Fletcher is examining the historical voting records of members of the U.S. Congress. For 175 representatives, Irwin has collected the voting record (yes or no) on 16 pieces...
-
Matthews Delivery Service has completed closing entries and the accounting cycle for 2014. The business is now ready to record January 2015 transactions. Jan. 3 Collected $ 900 cash from customer on...
-
Crane Company has several processing departments. Costs to be accounted for in the Assembly Department for November 2022 totaled $2,268,894 as follows. Work in process, November 1 Materials $78,800...
-
Richard Kerslake, a bond fund manager is considering the purchase of one of the following bonds to include in his portfolio. Bond Characteristics SUB RAV Maturity Date Coupon rate Interest payment...
-
Sara-J Co. has a preferred stock outstanding that pays annual dividends of $3.50 a share. At what price would this stock be trading if market yields were 7.5%? Use one of the dividend valuation...
-
A bumblebee can sense electric fields as the fields bend hairs on its body. Bumblebees have been conclusively shown to detect an electric field of 60 N/C. Could a bumblebee use this sense to detect...
-
Students in an introductory physics lab are producing a region of uniform electric field by applying a voltage to two 20-cmdiameter aluminum plates separated by 2.5 cm. They connect the two plates to...
-
Assume you have a sizable gain on 200 shares of stock that you bought 2 years ago for \($22\) per share and that is now (December 15) selling for \($50\) per share. Given a just announced tax rate...
-
Ibrahim bought 200 shares of a stock trading in the Abu Dhabi Securities Exchange at AED 12 (United Arab Emirates dirham) per share. Over time, the price of the stock increased to AED 18 per share....
-
Which provisions could best be justified as a means of controlling the economy? a) Write-off of research and development expenditures. b) The section 179 immediate write-off. c) Amortization of...
-
From a medical tourist perspective, compare Shouldice with the traditional hospital in terms of the key factors of competition. Using Table 15-3, why would Shouldice attract patients from outside the...
-
Scores for the California Peace Officer Standards and Training test are normally distributed, with a mean of 50 and a standard deviation of 10. An agency will only hire applicants with scores in the...
-
1. Find the z-score that corresponds to a cumulative area of 0.3632. 2. Find the z-score that has 10.75% of the distributions area to its right.
-
Find the z-score that corresponds to each percentile. 1. P 5 2. P 50 3. P 90
Study smarter with the SolutionInn App