Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 195,000 items were shipped to customers using 8,600 direct labor-hours. The company incurred a total of $30,530 in variable overhead costs. According to the company's standards, 0.04 direct labor-hours are required to fulfll an order for one item and the variable overhead rate is $3.60 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 195,000 items to customers? 2. What is the standard variable overhead cost allowed (SH × SR) to ship 195,000 items to customers? 3. What is the variable overhead spending variance? 4. What is the variable overhead rate variance and the variable overhead efficiency variance?

Computer World, Inc. manufactures computer parts and keyboards. The annual production and sales of computer parts is 1,000 units, while 1,200 keyboards are produced and sold. The company has traditionally used direct labor hours to allocate its overhead to products. Computer parts require 3 direct labor hours per unit, while keyboards require 2.5 direct labor hours per unit. The total estimated overhead for the period is $114,000. The company is looking at the possibility of changing to an activity-based costing system for its products. What is the predetermined overhead allocation rate using the traditional costing system?

Dillon Products manufactures various machined parts to customer specifications. The company uses a job-order costing system and applies overhead cost to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur $4,354,800 in manufacturing overhead cost at an activity level of 573,000 machine-hours. The company spent the entire month of January working on a large order for 12,600 custom-made machined parts. The company had no work in process at the beginning of January. Cost data relating to January follow: a. Raw materials purchased on account, $310,000. b. Raw materials used in production, $267.000 (80% direct materials and 20% indirect materials). c. Labor cost accrued in the factory, $177,000 (one-third direct labor and two-thirds indirect labor). d. Depreciation recorded on factory equipment, $63,600. e. Other manufacturing overhead costs incurred on account, $85,400 1. Manufacturing overhead cost was applied…

The Shoe For You Company manufactures two types of shoes; dress and casual shoes. For the month of May, the company plans to produce 21,000 pairs of dress shoes and 17,500 pairs of casual shoes. Both types of shoes are produced in the assembling and finishing departments. The direct labor rates for assembling and finishing departments are $13.00 per hour and $17.50 per hour, respectively. The following table indicates the amount of direct labor hours required for each type of shoe: Assembling Finishing Dress shoes 15 minutes per pair 30 minutes per pair Casual shoes 12 minutes per pair 15 minutes per pair Calculate the budgeted direct labor cost for dress shoes.

Logistics Solutions maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 125,000 items were shipped to customers using 4,400 direct labor-hours. The company incurred a total of $12,540 in variable overhead costs. According to the company's standards, 0.04 direct labor-hour is required to fulfill an order for one item and the variable overhead rate is $2.90 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 125,000 items to customers? 2. What is the standard variable overhead cost allowed (SH x SR) to ship 125,000 items to customers? 3. What is the variable overhead spending variance? 4. What are the variable overhead rate variance and the variable…

The Gilster Company, a machine tooling firm, has several plants. One plant, located in St. Cloud, Minnesota, uses a job order costing system for its batch production processes. The St. Cloud plant has two departments through which most jobs pass. Plant-wide overhead, which includes the plant manager’s salary, accounting personnel, cafeteria, and human resources, is budgeted at $400,000. During the past year, actual plantwide overhead was $385,000. Each department’s overhead consists primarily of depreciation and other machine-related expenses. Selected budgeted and actual data from the St. Cloud plant for the past year are as follows.     Department A   Department B Budgeted department overhead               (excludes plantwide overhead) $ 153,000     $ 439,900   Actual department overhead   170,000       459,900   Expected total activity:               Direct labor hours   50,000       25,000   Machine-hours   15,000       53,000   Actual activity:…

McCourt Company produces small engines for lawnmower producers. The accounts payable department at McCourt has 10 clerks who process and pay supplier invoices. The total cost of their salaries is $450,000. The work distribution for the activities that they perform is as follows: Activity Percentage of Time on Each Activity Comparing source documents 10 % Resolving discrepancies 55 % Processing payment 35 % Required: Assign the cost of labor to each of the three activities in the accounts payable department. Round your answers to the nearest dollar. Activity Cost Assignment Comparing source documents Sfill in the blank 1 Resolving discrepancies $fill in the blank 2 Processing payment Sfill in the blank 3 Comparing source documents Resolving discrepancies Processing payment

Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month Harbour has monthly overhead of $177,870, which is divided into the following activity pools: Setup costs Quality control Maintenance Total $ 72,000 66,270 39,600 $ 177,870 Number of setups Number of inspections Number of machine hours Home $38 20 354 790 units Home Work 49 41 320 1,200 2,100 385 The company also has compiled the following information about the chosen cost drivers: Work Total 90 705 3,300 $65 35 572 340 units Required: 1. Suppose Harbour uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. 2. Calculate the production cost per unit for each of Harbour's products under a traditional costing system. 3. Calculate Harbour's gross margin per unit for each product under…

Armada Shipping is a global logistics company. The company is organized into two divisions: Contracts and Retail. The Contracts Division, which is by far the larger division, handles customers who have regular shipping requirements and have signed contracts specifying costs and schedule for up to one year. The Retail Division handles shipments for customers who have only occasional shipping requirements and pay on an as-used basis. Billing for all customers is handled by the corporate Accounts Receivable Department. Accounts Receivable performs two major activities: billing and accounts. Billing refers to preparing and sending the bills as well as processing the payments. Accounts refers to establishing accounts, ensuring credit status, following up on collection, and so on. The costs of the Accounts Receivable Department are allocated to the two divisions based on the number of bills prepared. The manager of the Contracts Division has complained that the allocated costs from Accounts…

Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours. In the most recent month, 145,000 items were shipped to customers using 5,600 direct labor-hours. The company incurred a total of $17,080 in variable overhead costs. According to the company's standards, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.10 per direct labor-hour. Required: 1. What is the standard labor-hours allowed (SH) to ship 145,000 items to customers? 2. What is the standard variable overhead cost allowed (SH x SR) to ship 145,000 items to customers? 3. What is the variable overhead spending…