Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments usemachine hours (MH) and direct labor hours (DLH).Fabricating$1,330,000Assembly$480,000Overhead costDirect laborhoursMachine hours412,500 DLH 40,000 DLH95,000 MH78,500 MHLaval reports the following for one of its products, a desk lamp.Fabricating DepartmentAssembly DepartmentMachineHours perUnitMachineHours perUnitDirect LaborDirect LaborNumberHours per UnitHours per Unitof UnitsDesklampDLH per4unitМн рer2unitDLH per2unitМн рer0.5unit6,000Required:1. Determine the plantwide overhead rate using 452,500 direct labor hours as the allocation base.2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate.3. Compute departmental overhead rates based on machine hours in the Fabricating department and direct labor hoursin the Assembly department.4. Determine the overhead cost per unit for the desk lamp using the departmental overhead rates.Complete this question by entering your answers in the tabs below.Required Required Required Required24Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate.Plantwide Overhead RateHours UsedOverhead Cost per UnitDesk lamp< Required 1Required 3 > Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments usemachine hours (MH) and direct labor hours (DLH).FabricatingAssembly%$4480,0002$Overhead cost1,330,000Direct laborhoursMachine hours412,500 DLH 40,000 DLH95,000 MH78,500 MHLaval reports the following for one of its products, a desk lamp.Fabricating DepartmentMachineHours perUnitМн рerunitAssembly DepartmentDirect LaborHours per UnitMachineHours perUnitDirect LaborNumberHours per Unitof UnitsDLH perDLH per2unitМн рer0.5unitDesk6,000lampunitRequired:1. Determine the plantwide overhead rate using 452,500 direct labor hours as the allocation base.2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate.3. Compute departmental overhead rates based on machine hours in the Fabricating department and direct labor hoursin the Assembly department.4. Determine the overhead cost per unit for the desk lamp using the departmental overhead rates.Complete this question by entering your answers in the tabs below.Required Required Required Required1234Determine the plantwide overhead rate using 452,500 direct labor hours as the allocationbase.< Required 1Required 2 >

Hi student Since there are multiple subparts, we will answer only first three subparts.

Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). Fabricating 2$ 1,330,000 Assembly Overhead cost 480,000 Direct labor hours Machine hours 412,500 DLH 40,000 DLH 95,000 MH 78,500 MH Laval reports the following for one of its products, a desk lamp. Fabricating Department Machine Hours per Unit Assembly Department Machine Hours per Unit Direct Labor Direct Labor Number of Units Hours per Unit DLH per unit Hours per Unit Desk lamp MH per 2 unit DLH per unit 0.5 MH per unit 6,000 Required: 1. Determine the plantwide overhead rate using 452,500 direct labor hours as the allocation base. 2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate. 3. Compute departmental overhead rates based on machine hours in the Fabricating department and direct labor hours in the Assembly department.

Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). Fabricating 2$ 1,330,000 Assembly Overhead cost 480,000 Direct labor hours Machine hours 412,500 DLH 40,000 DLH 95,000 MH 78,500 MH Laval reports the following for one of its products, a desk lamp. Fabricating Department Machine Hours per Unit Assembly Department Machine Hours per Unit Direct Labor Direct Labor Number of Units Hours per Unit DLH per unit Hours per Unit Desk lamp MH per 2 unit DLH per unit 0.5 MH per unit 6,000 Required: 1. Determine the plantwide overhead rate using 452,500 direct labor hours as the allocation base. 2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate. 3. Compute departmental overhead rates based on machine hours in the Fabricating department and direct labor hours in the Assembly department.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 7E: The management of Nova Industries Inc. manufactures gasoline and diesel engines through two...

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Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: a. Determine the activity rate for each activity. b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round to the nearest cent.
Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is 2,948,125. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit: a. Determine the single plant wide overhead rate. b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products, rounded to the nearest dollar.
Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold through specialty golf shops. The company is in the process of developing itsoperating budget for the coming year. Selected data regarding the companys two products areas follows: Manufacturing overhead is applied to units using direct labor hours. Variable manufacturing overhead Ls projected to be 25,000, and fixed manufacturing overhead is expected to be15,000. The estimated cost to produce one unit of the laminated putter head is: a. 42. b. 46. c. 52. d. 62.
Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of direct labor and direct materials per unit for the year are as follows: The standard price paid per pound of direct materials is 1.60. The standard rate for labor is 8.00. Overhead is applied on the basis of direct labor hours. A plantwide rate is used. Budgeted overhead for the year is as follows: The company expects to work 12,000 direct labor hours during the year; standard overhead rates are computed using this activity level. For every small stapler produced, the company produces two regular staplers. Actual operating data for the year are as follows: a. Units produced: small staplers, 35,000; regular staplers, 70,000. b. Direct materials purchased and used: 56,000 pounds at 1.5513,000 for the small stapler and 43,000 for the regular stapler. There were no beginning or ending direct materials inventories. c. Direct labor: 14,800 hours3,600 hours for the small stapler and 11,200 hours for the regular stapler. Total cost of direct labor: 114,700. d. Variable overhead: 607,500. e. Fixed overhead: 350,000. Required: 1. Prepare a standard cost sheet showing the unit cost for each product. 2. Compute the direct materials price and usage variances for each product. Prepare journal entries to record direct materials activity. 3. Compute the direct labor rate and efficiency variances for each product. Prepare journal entries to record direct labor activity. 4. Compute the variances for fixed and variable overhead. Prepare journal entries to record overhead activity. All variances are closed to Cost of Goods Sold. 5. Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Can you compute the total direct materials and direct labor usage variances? Explain.
Douglas Davis, controller for Marston, Inc., prepared the following budget for manufacturing costs at two different levels of activity for 20X1: During 20X1, Marston worked a total of 80,000 direct labor hours, used 250,000 machine hours, made 32,000 moves, and performed 120 batch inspections. The following actual costs were incurred: Marston applies overhead using rates based on direct labor hours, machine hours, number of moves, and number of batches. The second level of activity (the right column in the preceding table) is the practical level of activity (the available activity for resources acquired in advance of usage) and is used to compute predetermined overhead pool rates. Required: 1. Prepare a performance report for Marstons manufacturing costs in the current year. 2. Assume that one of the products produced by Marston is budgeted to use 10,000 direct labor hours, 15,000 machine hours, and 500 moves and will be produced in five batches. A total of 10,000 units will be produced during the year. Calculate the budgeted unit manufacturing cost. 3. One of Marstons managers said the following: Budgeting at the activity level makes a lot of sense. It really helps us manage costs better. But the previous budget really needs to provide more detailed information. For example, I know that the moving materials activity involves the use of forklifts and operators, and this information is lost when only the total cost of the activity for various levels of output is reported. We have four forklifts, each capable of providing 10,000 moves per year. We lease these forklifts for five years, at 10,000 per year. Furthermore, for our two shifts, we need up to eight operators if we run all four forklifts. Each operator is paid a salary of 30,000 per year. Also, I know that fuel costs about 0.25 per move. Assuming that these are the only three items, expand the detail of the flexible budget for moving materials to reveal the cost of these three resource items for 20,000 moves and 40,000 moves, respectively. Based on these comments, explain how this additional information can help Marston better manage its costs. (Especially consider how activity-based budgeting may provide useful information for non-value-added activities.)
s Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). Overhead cost Direct labor hours Machine hours Fabricating $ 1,260,000 Desk lamp 131,600 DLH 90,000 MH 28,000 DLH 72,500 MH Laval reports the following for one of its products, a desk lamp. Fabricating Department Number of Direct Labor Hours Units per Unit 6,000 4 DLH per unit Assembly $ 336,000 Machine Hours per Unit 3 MH per unit Required 1 Required 2 Required 3 Required: 1. Determine the plantwide overhead rate using 159,600 direct labor hours as the allocation base. 2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate. 3. Compute departmental overhead rates based on machine hours in the Fabricating department and direct labor hours in the Assembly department. 4. Determine the overhead cost per unit for the desk lamp using the departmental overhead rates. Complete this question…
Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). Fabricating $ 1,330,000 Assembly 24 480,000 Overhead cost Direct labor hours Machine hours 412,500 DLH 40,000 DLH 95,000 MH 78,500 MH Laval reports the following for one of its products, a desk lamp. Fabricating Department Assembly Department Machine Hours per Unit Machine Hours per Unit Direct Labor Direct Labor Number of Units Hours per Unit Hours per Unit DLH per 4 unit Мн рer 2 unit DLH per Мн рer 0.5 unit Desk 6,000 lamp unit Required: 1. Determine the plantwide overhead rate using 452,500 direct labor hours as the allocation base. 2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate. 3. Compute departmental overhead rates based on machine hours in the Fabricating department and direct labor hours in the Assembly department. 4. Determine the overhead cost per unit for the desk…
Shilongo Ltd uses costing to attribute costs to individual products and services provided to its customers. It has begun the preparation of its fixed production cost budget for the forthcoming period. The company three production departments Machining, Assembly and Finishing; and two service departments Stores and Maintenance. The following costs have been produced: Machining Assembly Finishing Stores Maintenance 1,000 Overhead cost $ 6,000 2,500 1,500 800 The number of machine and labor hours budgeted for the forthcoming period is budgeted as follows:- Machining Assembly Finishing Machine hours 500 40 50 Labor hours 100 300 200 Overheads are absorbed in Assembly and Finishing departments on a Labor hour basis; and in Machining departments they are absorbed on a machine hour basis. It has been estimated that service departments usage is as follows: Machining Assembly Finishing Stores Maintenance Maintenance 55% 20% 20% 5% - Stores 40% 30% 20% 10% Required: (a) Prepare a schedule of…
Shilongo Ltd uses costing to attribute costs to individual products and services provided to its customers. It has begun the preparation of its fixed production cost budget for the forthcoming period. The company three production departments Machining, Assembly and Finishing; and two service departments Stores and Maintenance. The following costs have been produced: Machining Assembly Finishing Stores Maintenance 2,500 1,500 1,000 Overhead cost $ 6,000 800 The number of machine and labor hours budgeted for the forthcoming period is budgeted as follows:- Machining Assembly Finishing Machine hours 500 40 50 Labor hours 100 300 200 Overheads are absorbed in Assembly and Finishing departments on a Labor hour basis; and in Machining departments they are absorbed on a machine hour basis. It has been estimated that service departments usage is as follows: Machining Assembly Finishing Stores Maintenance Maintenance 55% 20% 20% 5% - Stores 40% 30% 20% 10% Required: b) Calculate the overhead…
Shilongo Ltd uses costing to attribute costs to individual products and services provided to its customers. It has begun the preparation of its fixed production cost budget for the forthcoming period. The company three production departments Machining, Assembly and Finishing; and two service departments Stores and Maintenance. The following costs have been produced: Machining Assembly Finishing Stores Maintenance 2,500 1,500 1,000 Overhead cost $ 6,000 800 The number of machine and labor hours budgeted for the forthcoming period is budgeted as follows:- Machining Assembly Finishing Machine hours 500 40 50 Labor hours 100 300 200 Overheads are absorbed in Assembly and Finishing departments on a Labor hour basis; and in Machining departments they are absorbed on a machine hour basis. It has been estimated that service departments usage is as follows: Machining Assembly Finishing Stores Maintenance Maintenance 55% 20% 20% 5% - Stores 40% 30% 20% 10% Required: c) Prepare a quotation for…
Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). Determine the plantwide overhead rate using 159,600 direct labor hours as the allocation base. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate. Compute departmental overhead rates based on machine hours in the Fabricating department and direct labor hours in the Assembly department. Determine the overhead cost per unit for the desk lamp using the departmental overhead rates.
A company sells two types of products: standard and deluxe. It prepares the following analysis showing budgeted cost and cost driver activity for each of its three activities. Activity Factory services Budgeted Cost $ 104,400 Activity Cost Driver Square feet Setup $ 11,500 Setups Quality control $ 116,250 Units inspected Compute an activity rate for each activity using activity-based costing. Activity Factory services Setup Quality control Budgeted Cost $ 104,400 11,500 116,250 Budgeted Activity Usage Budgeted Activity Usage Deluxe 2,800 200 5,250 Standard 3,000 300 2,500 Activity Rate Total 5,800 500 7,750