Kingsley Products estimated that direct. labor for the year would be 64,080 hours. The company also estimated that the fixed overhead cost for the year would be $160,200. They further estimated the variable overhead cost to be $4.00 per direct labor-hour. All overhead at Kingsley Products is applied on the basis of direct labor- hours. During the year, fixed overhead costs were exactly as planned ($160,200). Variable overhead was incurred at $4.50 per direct labor-hour. Underapplied overhead for the year was calculated as $18,150. Required: How many direct labor-hours were worked during the period?

Kingsley Products estimated that direct. labor for the year would be 64,080 hours. The company also estimated that the fixed overhead cost for the year would be $160,200. They further estimated the variable overhead cost to be $4.00 per direct labor-hour. All overhead at Kingsley Products is applied on the basis of direct labor- hours. During the year, fixed overhead costs were exactly as planned ($160,200). Variable overhead was incurred at $4.50 per direct labor-hour. Underapplied overhead for the year was calculated as $18,150. Required: How many direct labor-hours were worked during the period?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 10E: SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that...

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If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of capacity the next month, will a different cost per unit be charged to the work-in-process account each month for factory overhead assuming that a predetermined annual overhead rate is used?
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SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
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Kingsley Products estimated that direct labor for the year would be 64,320 hours. The company also estimated that the fixed overhead cost for the year would be $160,800. They further estimated the variable overhead cost to be $4.00 per direct labor-hour. All overhead at Kingsley Products is applied on the basis of direct labor-hours. During the year, fixed overhead costs were exactly as planned ($160,800). Variable overhead was incurred at $4.50 per direct labor-hour. Underapplied overhead for the year was calculated as $18,600.