ABC Company has two support departments, HR and IS, and two operating departments, Production and Sales. HR department costs are allocated using number of employees, and IS department costs are allocated using Labor hours. For July 2019, the following information is given: Cost Before Allocation Number of Employees Labor Hours HR IS $90,000 $60,000 2,000 Answer: 6,000 Production $360,000 3,000 15,000 Sales $520,000 5,000 9,000 Total $1,030,000 10,000 30,000 Using the Direct method, What IS department cost will be allocated to the Sales departments?
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- Swifty Corporation provide the information from its accounting records for 2019: Expected production 80000 labor hours, Actual production 76000 labor hours, Budgeted overhead 1500000, Actual overhead 1440000. How much is the overhead application rate if Swifty Corporation bases it on direct labor hours?Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2020, the following estimates were made for the year. Department D E K Manufacturing overhead $854,000 $1,500,000 $1,020,000 Direct labor costs $1,220,000 $1,875,000 $675,000 Direct labor hours 150,000 125,000 60,000 Machine hours 600,000 750,000 120,000 During January, the job cost sheets showed the following costs and production data. Department D E K Direct materials used $210,000 $189,000 $117,000 Direct labor costs $180,000 $165,000 $56,250 Direct labor costs $180,000 $165,000 $56,250 Manufacturing overhead incurred $148,500 $186,000 $118.500 Direct labor hours 12,000 16,500 5,250 Machine hours 51,000 67,500 10,390 (a) Compute the predetermined overhead rate for each…Use the following selected information for Jim Beam Company For the year ended 31st December 2020 Ending Work in Process Managing Director salary Direct Labor Incurred in period Rent – factory Beginning Work in Process Shop cleaner salary Rent – shop Rent – head office $1,000 Direct Materials Used (applied to production) $23,000 $132,000 $25,000 $5,500 $10,000 $15,000 $9,000 $17,000 $57,000 Factory Manager salary The total of Factory Overheads for the period is: Select one: O a. $97,000 O b. $62,500 O c. $24,000 O d. $79,500
- The following information relates to the activities of the production department of Will Smith Sdn Bhd for the month of March 2019: Production Department Order Number 123 Direct materials consumed 120,000 20 Direct wages 180,000 25 Overhead chargeable 150,000 Direct labor hours worked 30,000 5 Machine hours operated 10,000 2 The company adds a margin of 50 per cent to the total production cost of specific units in order to cover administration expenses and to provide a profit. Required: a) Calculate the total selling price of order number 123 if overhead is absorbed using the following methods of overhead absorption: I. Direct labor hours II. Machine hours b) State which of the two methods you would recommend for the production department.Edward ltd comprises of 3 production departments and 2 service departments. The following information is provided for Edward Ltd for 2019. Supervisor's Salary $ Machining 300,000 Assembly 200,000 Finishing 250,000 Canteen 120,000 Maintenance 150,000 $ Factory Rent 300,000 Heat & Light 200,000 General Repairs 60,000 Machine Depreciation 80,000 Machine Insurance 90,000 Business Rates 75,000 Machining Assembly Finishing Canteen Maintenance Floor Space occupied (m2) 400 200 200 150 50 Value of machinery ($'000) 300 400 200 50 50 The service department work for other departments as follows Machining Assembly Finishing Canteen Maintenance Service carried out by canteen Canteen 30% 30% 40% Maintenance 25% 50% 25% Using the overhead analysis sheet for 2019, determine the overhead allocated and apportioned to each of the five departments.Edward ltd comprises of 3 production departments and 2 service departments. The following information is provided for Edward Ltd for 2019. Supervisor's Salary $ Machining 300,000 Assembly 200,000 Finishing 250,000 Canteen 120,000 Maintenance 150,000 $ Factory Rent 300,000 Heat & Light 200,000 General Repairs 60,000 Machine Depreciation 80,000 Machine Insurance 90,000 Business Rates 75,000 Machining Assembly Finishing Canteen Maintenance Floor Space occupied (m2) 400 200 200 150 50 Value of machinery ($'000) 300 400 200 50 50 The service department work for other departments as follows Machining Assembly Finishing Canteen Maintenance Service carried out by canteen Canteen 30% 30% 40% Maintenance 25% 50% 25% Using the overhead analysis sheet for 2019, determine the overhead allocated and apportioned to each of the five departments. Calculate the total overheads included in the…
- Al Shams Manufacturing LLC has furnished the following information for the month of March 2019: Materials used is RO 45,000, Direct labor is RO 28,000, Labor hours worked is 7,000, Hours of machine operation is 5,000 and Overhead cost is RO 21,000. The department during the period has executed an order (job). The relevant information is as follows: Materials used is RO 2,000, Direct labor is RO 1,200, Labor hours worked is 500 and Hours of machines operation is 225. Calculate the overhead chargeable to the job based on percentage of direct material cost. a. RO 945 b. RO 900 c. RO 933 d. RO 1500Agassi Company uses a job order cost system in each of its three manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department D, direct labor hours in Department E, and machine hours in Department K. In establishing the predetermined overhead rates for 2020, the following estimates were made for the year. Manufacturing overhead Direct labor costs Direct labor hours Machine hours Direct materials used Direct labor costs Direct labor hours D $924,000 $1,320,000 Machine hours 150,000 Manufacturing overhead incurred 600,000 Department E K $1,500,000 $900,000 $1,875,000 $675,000 During January, the job cost sheets showed the following costs and production data. D 125,000 12,000 750,000 51,000 K $210,000 $189,000 $117,000 $180,000 $165,000 $56,250 $148,500 $186,000 $118,500 60,000 120,000 Department E 16,500 67,500 5,250 10,440Lake Balboa Manufacturing Company decides to relate total factory overhead costs to direct labor hours (DLH) to develop a cost-volume formula in the form of y = a + bx. Observations from 2019 are collected. They are given and on the excel file. Month Direct Labor Hours Factory Overhead January 9,000 13,000 February 19,000 20,000 March 11,000 14,000 April 14,000 16,000 May 23,000 25,000 June 12,000 20,000 July 12,000 20,000 August 22,000 23,000 September 7,000 14,000 October 13,000 22,000 November 15,000 18,000 December 17,000 18,000 Total 174,000 hours $225,000 In October of 2020, the company used 13,000 direct labor hours. Using the cost formula for factory overhead calculated using the High-Low Method, calculate the factory overhead for October 2020.
- Hill Manufacturing uses departmental cost driver rates to apply manufacturing overhead costs to products. Manufacturing overhead costs are applied on the basis of machine hours in the Machining Department and on the basis of direct labor hours in the Assembly Department. At the beginning of 2020, the following estimates were provided for the coming year: Direct labor hours Machine hours Direct labor cost Manufacturing overhead costs Machining Direct labor hours Machine hours Direct material cost Direct labor cost 10,000 DLH 100,000 MH $80,000 $250,000 The accounting records of the company show the following data for Job # 846: Machining 50 DLH 170 MH Assembly 90,000 DLH 5,000 MH $2,700 $400 $720,000 $360,000 Assembly 120 DLH 10 MH $1,600 $900 4 Required: 1. Compute the manufacturing overhead allocation rate for each department. 2. Compute the total cost of Job #846. 3. Provide possible reasons why Hill Manufacturing uses two different cost allocation rates.Gensource Company provided the following information from its accounting records for 2021: Estimated production 60,000 labor hours Actual production 56,000 labor hours Estimated overhead $1,800,000 Actual overhead $1,740,000 How much is the predetermined overhead rate if the Company bases it on direct labor hours? Select one: O a. $29.00 per hour b. $32.14 per hour c. $30.00 per hour d. $31.07 per hour2. Cocoa Mfg. Co. charges factory overhead to production using departmental rates. For 2019, the rates are based on the following estimates: Department A: 20,000 direct labor hours Department B: 5,000 units of production The following data are given on the departmental factory overhead of Chocolate Mfg. Co.: Service Provided by: Dept. T Before Distribution Of Service Dept. Expense Dept. S Dept. A P28,000 60% 40% Dept. B 30,000 25% 55% Dept. S 6,590 5% Dept. T 9,000 15% Requirement: Allocate the service department costs to operating departments and compute the factory overhead rate using the following methods: Direct method Step method Algebraic method