Mannerman Products, Incorporated, operates an electric power plant which provides all electrical power for the company's Machining and Fabrication departments. Information on kilowatt-hours (kwh) of power usage in these departments for May follow: Budgeted kwh Actual kwh The costs of the electric power plant are all fixed. Budgeted fixed costs for May totaled $60,000 and are determined by peak-period requirements. Actual fixed costs for the month totaled $65,000. The Machining Department requires 60% of the peak-period capacity and the Fabrication Department requires 40%. Multiple Choice For performance evaluation purposes, how much of the electric power plant's fixed costs should be charged to the Fabrication department at the end of the month for purposes of evaluating performance? $18,000 $24,000 Machining Fabrication 20,000 10,000 25,000 15,000 $30,000 Total 30,000 40,000 $26,000

Mannerman Products, Incorporated, operates an electric power plant which provides all electrical power for the company's Machining and Fabrication departments. Information on kilowatt-hours (kwh) of power usage in these departments for May follow: Budgeted kwh Actual kwh The costs of the electric power plant are all fixed. Budgeted fixed costs for May totaled $60,000 and are determined by peak-period requirements. Actual fixed costs for the month totaled $65,000. The Machining Department requires 60% of the peak-period capacity and the Fabrication Department requires 40%. Multiple Choice For performance evaluation purposes, how much of the electric power plant's fixed costs should be charged to the Fabrication department at the end of the month for purposes of evaluating performance? $18,000 $24,000 Machining Fabrication 20,000 10,000 25,000 15,000 $30,000 Total 30,000 40,000 $26,000

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter19: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 2CMA: Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing...

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Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiners master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employers share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the companys union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 5,600 glare filters in inventory on December 31 of the current year, and has a policy of carrying 35 percent of the following month's projected sales in inventory. Information on the first four months of the coming year is as follows: Required: 1. Prepare the following monthly budgets for Greiner Company for the first quarter of the coming year. Be sure to show supporting calculations. a. Production budget in units b. Direct labor budget in hours c. Direct materials cost budget d. Sales budget 2. Calculate the total budgeted contribution margin for Greiner Company by month and in total for the first quarter of the coming year. Be sure to show supporting calculations. (CMA adapted)
Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing cost information for the next year: If Adam uses the step-down (sequential) method, beginning with the Maintenance Department, to allocate support department costs to production departments, the total overhead (rounded to the nearest dollar) for the Machining Department to allocate to its products would be: a. 407,500. b. 422,750. c. 442,053. d. 445,000.
Harrison, Inc. is preparing their budget for the upcoming year and requires a breakdown of the costs of power used in its factory into the fixed and variable components. They have determined the number of direct labor hours worked affects the cost of power. The following data on the cost of power used and direct labor hours worked are available for the last six months of this year: Month July August September October High-Low Method November December Total Cost of Power $ 14,850 15,400 16,370 19,800 17,600 18,500 $102.520 Direct Labor Hours 3,000 2,050 2,900 3,650 2,670 2,650 16.920 1. Assuming that Harrison uses the high-low method of analysis, calculate the cost function to be used to estimate the power costs. 2. They have determined that production needs will require 8,467 direct labor hours. Using the cost function calculated above, what is the estimated cost of power?
The cost formula for the maintenance department of Rambo Limited is $19,200 per month plus $7.50 per machine hour used by the production department. Required: a. Calculate the maintenance cost that would be budgeted for a month in which 6,600 machine hours are planned to be used. b. Prepare an appropriate performance report for the maintenance department assuming that 7,100 machine hours would be used in the month of May and that the total actual maintenance cost incurred in May was $68,950. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the maintenance cost that would be budgeted for a month in which 6,600 machine hours are planned to be used. Maintenance cost
Ellington, SRL is developing their manufacturing overhead budget for February, which is based on budgeted direct labor hours. The variable overhead rate is $16.40 per direct labor hour and 7,900 direct labor hours are budgeted for February. Fixed manufacturing overhead is budgeted at $67,000. All overhead costs are current cash flows except for $10,720 of depreciation. What should the manufacturing overhead budget indicate for cash disbursements for manufacturing overhead for the month of February?
Katherin, Ltd. is developing their manufacturing overhead budget for May, which is based on budgeted direct labor hours. The variable overhead rate is $16.05 per direct labor hour and 11,552 direct labor hours are budgeted for May. Fixed manufacturing overhead is budgeted at $102,000. All overhead costs are current cash flows except for $15,300 of depreciation. The predetermined overhead rate every month is recomputed every month. What should the predetermined overhead rate for May be? Select one: A. $24.88 B. $26.20 C. $8.83 D. $17.66 E. $17.37
Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 10,000 hours for production: Variable overhead cost: Indirect factory labor $24,000 Power and light 7,700 Indirect materials 11,000 Total variable overhead cost $ 42,700 Fixed overhead cost: Supervisory salaries $46,280 Depreciation of plant and equipment 12,180 Insurance and property taxes 22,740 Total fixed overhead cost 81,200 Total factory overhead cost $123,900 Tannin has available 14,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 9,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Actual variable factory overhead cost: Indirect factory labor $21,060 Power and…
The following data pertains to the month of October for ElmCo. when production was budgeted to be 5,000 units of P90. Fixed manufacturing overhead traceable to the production of P90 is budgeted to be $15,000 for the month and is assigned on the basis of the number of units manufactured using a pre-determined rate. Actual production of P90 for October was 4,600 units and actual Fixed manufacturing overhead costs were $14,650. Determine the fixed overhead volume variance. (Negative numbers indicate a favorable variance.)
Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 10,000 hours for production: Variable overhead cost: Indirect factory labor $24,000 Power and light 7,700 Indirect materials 11,000 Total variable overhead cost $ 42,700 Fixed overhead cost: Supervisory salaries $46,280 Depreciation of plant and equipment 12,180 Insurance and property taxes 22,740 Total fixed overhead cost 81,200 Total factory overhead cost $123,900 Tannin has available 14,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 9,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Actual variable factory overhead cost: Indirect factory labor $21,060 Power and…
The cost formula for the maintenance department of the Eifel Co. is $6,500 per month plus $3.50 per machine hour used by the production department. a. Calculate the maintenance cost that would be budgeted for the month of May in which 5,700 machine hours are planned to be used. b. Prepare an approproate performance report for the maintenance department assuming that 5,860 machine hours were actually used in the month of May, and the total maintenance cost inccured was $28,010.
Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 10,000 hours for production: Variable overhead cost: Indirect factory labor $24,000 Power and light 7,700 Indirect materials 11,000 Total variable overhead cost $ 42,700 Fixed overhead cost: Supervisory salaries $46,280 Depreciation of plant and equipment 12,180 Insurance and property taxes 22,740 Total fixed overhead cost 81,200 Total factory overhead cost $123,900 Tannin has available 14,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 9,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Actual variable factory overhead cost: Indirect factory labor $21,060 Power and…
Pease Contractors is a local home remodeling company. In analyzing financial performance, the accountant compares actual results with a flexible budget. The standard direct labor rates used in the flexible budget are established each year at the time the annual plan is formulated and held constant for the entire year. The standard direct labor rates in effect for the current fiscal year and the standard hours allowed for the actual output of work for August are shown in the following schedule. Worker Classification Standard Direct Labor Rate per Hour Standard Direct Labor-Hours Allowed for Output Supervisor $ 50 1,800 Skilled 30 2,250 General 20 4,950 The actual direct labor-hours worked and the actual direct labor rates per hour experienced for the month of August were as follows. Worker Classification Actual Direct Labor Rate per Hour Actual Direct Labor-Hours Supervisor $ 54 2,112 Skilled 32 2,112 General 18 5,376 Required: Calculate the dollar…