FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Related questions
Concept explainers
Topic Video
Question
Anazi Leather Company manufactures leather handbags and moccasins. The company has been using the single plantwide factory
Handbags = 60,000 units, 3 hours of direct labor
Moccasins = 40,000 units, 2 hours of direct labor
Total budgeted
The company has two different production departments: Cutting and Sewing. The Cutting Department has a factory overhead budget of $80,000. Each unit will require 1 direct labor hour or a total of 100,000 direct labor hours.
The Sewing Department estimates factory overhead in the amount of $280,000. Handbags require 2 hours of sewing time, and Moccasins require 1 hour for a total of 160,000 direct labor hours.
Using the multiple production department factory overhead rate method, compute the total factory overhead to be allocated to each product using direct labor hours as the allocation base. Round interim calculations to two decimal places, if necessary.
| Handbags | _________ |
| Moccasins | ________ |
| Total Factory Overhead Allocation | ________ |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Dazzle Party is a small business that produces decorative balloons for events. Dazzle Party uses normal costing and assigns manufacturing overhead (MOH) costs using labour hours as the allocation base. Budgeted and actual production data for the year 2023 is provided below. Budget $60,000 120,000 Actual $52,000 MOH costs Labour-hours 110,000 Required: Calculate the difference between the allocated MOH cost and the actual MOH cost incurred in 2023. Clearly state whether this difference represents a case of under-allocation or over-allocation of MOH.arrow_forwardDrippin' in Heat manufactures the finest formal wear west of the Mississippi. The company produces two main products: Suit Jackets and Sport Coats. Currently the company uses a traditional overhead rate in which Manufacturing Overhead is allocated to products based on direct labor hours logged. The projected production levels for the period are 1,200 Suit Jackets and 400 Sport Coats. Due to profitability concerns, management is considering switching to Activity-Based Costing (ABC). Management has divided manufacturing overhead costs into three activities and cost pools: Assembly $30,000; Machine Setup $20,000; and Product Movement $102,400. Management has identified the following cost drivers for each overhead activity: direct labor hours for assembly, number of setups for machine setup, and number of moves for product movement. The following information has been compiled for each product line: Direct Labor Requirements Machine Setup Requirements Product Movement Requirements Suit…arrow_forwardAnazi Leather Company manufactures leather handbags and moccasins. The company has been using the single plantwide factory overhead rate method but has decided to evaluate the multiple production department factory overhead rate method to allocate factory overhead. The factory overhead estimated per unit together with direct materials and direct labor will help determine selling prices. Handbags = 60,000 units, 3 hours of direct labor Moccasins = 40,000 units, 2 hours of direct labor Total budgeted factory overhead cost = $360,000 The company has two different production departments: Cutting and Sewing. The Cutting Department has a factory overhead budget of $80,000. Each unit will require 1 direct labor hour or a total of 100,000 direct labor hours. The Sewing Department estimates factory overhead in the amount of $280,000. Handbags require 2 hours of sewing time, and Moccasins require 1 hour for a total of 160,000 direct labor hours. Using the multiple production department factory…arrow_forward
- Blackwelder Factory produces two similar products: small table lamps and desk lamps. The total factory overhead budget is $615,000 with 478,000 estimated direct labor hours. It is further estimated that small table lamp production will require 261,000 direct labor hours, and desk lamp production will need 125,000 direct labor hours. Using a single plantwide factory overhead rate with an allocation base of direct labor hours, the factory overhead that Blackwelder Factory will allocate to small table lamp production if actual direct labor hours for the period for small table lamp production is 183,000 would be a.$518,641 b.$877,131 c.$236,070 d.$739,700arrow_forwardPlease help answer: fixed overhead spending variance for Nov. And variable overhead spending variance for Nov.arrow_forwardGibson Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Cost Cost driver Unit Level $50,600 Req A and B 2,300 labor hours. Production of 890 sets of cutting shears, one of the company's 20 products, took 210 labor hours and 9 setups and consumed 10 percent of the product-sustaining activities. Complete this question by entering your answers in the tabs below. Req C a. Allocated cost b. Allocated cost Activities Batch Level $ 21,160 46 setups Required a. Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using…arrow_forward
- Scorpio makes premium bikes using two departments, assembly and painting. Assembly estimates using 868,000 machine hours and painting uses 41,000 machine hours. Fixed manufacturing overhead costs are estimated to be $10,000,000 for assembly and $751,000 for painting. Variable manufacturing overhead per machine hour is $11.5 in both departments. Machine hours are used as the allocation base for a plantwide predetermined manufacturing overhead application rate. A bike dealership shop places an order for 20 bikes. The order requires 1,030 machine hours in assembly and 105 machine hours in painting. The job also requires $54,000 of direct materials and $108,000 of direct labor. What is the unit product cost (per bike) for the job when Scorpio uses a plantwide approach to calculating its predetermined manufacturing overhead application rate? Round your answer to 2 d.p. Do not round intermediary calculations.arrow_forwardPalladium Inc. produces a variety of household cleaning products. Palladium's controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per Direct Labor Hour Maintenance Power Indirect labor Rent $86,000 140,000 $0.20 0.45 2.10 35,000 Next year, Palladium expects production to require 88,000 direct labor hours Exercise 9-63 Flexible Budget for Various Levels of Activity Refer to the information for Palladium Inc. above. Required: 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. 2. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected.arrow_forwardSkyline Florists uses an activity-based costing system to compute the cost of making floral bouquets and delivering the bouquets to its commercial customers. Company personnel who earn $220,000 typically perform both tasks; other firm-wide overhead is expected to total $80,000. These costs are allocated as follows: Bouquet Production Delivery Other Wages and salaries 70 % 20 % 10 % Other overhead 50 % 30 % 20 % Skyline anticipates making 20,000 bouquets and 5,000 deliveries in the upcoming year.What is the cost of wages and salaries and other overhead that would be charged to each bouquet made?arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education