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Stewart Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plant-wide factory overhead rate for allocating overhead to products. However,

Stewart Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plant-wide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. From the following information, using a single plant-wide rate, determine the overhead rate per unit for Product A:

Overhead

Direct Labor Hours (dlh)

Product

A

B

Painting Dept.

$248,000

10,000 dlh

16 dlh 4 dlh
Finishing Dept.

72,000

10,000

4 16
Totals

$320,000

20,000 dlh

20 dlh 20 dlh

========

==========

====== ======
a. $496.00 per unit
b. $320.00 per unit
c. $144.00 per unit
d. $640.00 per unit

Stewart Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plant-wide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. From the following information, using a single plant-wide rate, determine the overhead rate per unit for Product B:

Overhead Direct Labor Hours (dlh) Product
A B
Painting Dept. $248,000 10,000 dlh 16 dlh 4 dlh
Finishing Dept. 72,000 10,000 4 16
Totals $320,000 20,000 dlh 20 dlh 20 dlh
======== ========== ====== ======
a. $320.00
b. $496.00
c. $144.00
d. $640.00

The single plantwide factory overhead rate is $52 per direct labor hour. The company implements activity-based costing using four different activity bases, including direct labor hours (and three others). What can be said about the direct labor rate under activity-based costing relative to the single plantwide rate?

a. The direct labor rate under activity-based costing will be equal to $52 per direct labor hour.
b. The direct labor rate under activity-based costing cannot be compared meaningfully to the $52 per direct labor hour rate.
c. The direct labor rate under activity-based costing must be less than $52 per direct labor hour.
d. The direct labor rate under activity-based costing must be greater than $52 per direct labor hour.

The Nite Lite Factory produces two products - small lamps and desk lamps. It has two separate departments - finishing and production. The overhead budget for the finishing department is $550,000, using 500,000 direct labor hours. The overhead budget for the production department is $400,000 using 80,000 direct labor hours. If the budget estimates that a desk lamp will require 1 hours of finishing and 2 hours of production, how much factory overhead will be allocated to each unit of desk lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours?

a. $11.10
b. $10.00
c. $4.91
d. $5.00

The Delph Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and assembly. Data for the products and departments are listed below.

Product Number of units Labor hrs per unit Machine hours per unit
Blinks 1,000 4 5
Dinks 2,000 2 8

All of the Machine hours take place in the Fabrication department, which has an estimated overhead of $84,000. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $72,000. The Delph Company usesa departmental overhead rates. The fabrication department uses machine hours for an allocation base, and the assembly department uses labor hours. What is the overhead cost per unit for Dinks?

$64
$44
$56
$50

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