FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Spotted Cow Dairy Company manufactures three products—whole milk, skim milk, and cream—in two production departments, Blending and Packing. The factory
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- Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: Standard Quantityor Hours Standard Priceor Rate Standard Cost Direct materials 2.20 ounces $ 16.00 per ounce $ 35.20 Direct labor 0.80 hours $ 12.00 per hour 9.60 Variable manufacturing overhead 0.80 hours $ 2.50 per hour 2.00 Total standard cost per unit $ 46.80 During November, the following activity was recorded related to the production of Fludex: Materials purchased, 11,000 ounces at a cost of $160,600. There was no beginning inventory of materials; however, at the end of the month, 3,100 ounces of material remained in ending inventory. The company employs 23 lab technicians to work on the production of Fludex. During November, they each worked an average of 150 hours at an average pay rate of $11.00 per hour.…arrow_forwardTiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow: Basic Dominator Total Units produced 1,050 450 1,500 Machine-hours 3,800 1,800 5,600 Direct labor-hours 3,600 1,500 5,100 Direct materials costs $ 11,400 $ 3,400 $ 14,800 Direct labor costs $ 73,800 $39,800 $ 113,600 Manufacturing overhead costs $ 181,764 Total costs $ 310,164 Required: Compute the predetermined overhead rate assuming that Tiger Furnishings uses direct labor costs to allocate overhead costs. (Round your answer to 2 decimal places.)arrow_forwardDalton Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 1,400 units. Dalton made 24,000 blankets during the prior accounting period. The cost of producing the blankets is summarized here. Materials cost ($10 per unit x 24,000) Labor cost ($9 per unit x 24,000) Manufacturing supplies ($1.50 × 24,000) Batch-level costs (20 batches at $4,200 per batch) Product-level costs. Facility-level costs Total costs Cost per unit = $846,000 ÷ 24,000 = $35.25 $ 240,000 216,000 36,000 84,000 96,000 174,000 $ 846,000 Required a. Sunny Motels has offered to buy a batch of 700 blankets for $25 each. Dalton's normal selling price is $46 per unit. Calculate the relevant cost per unit for the special order. Based on the preceding quantitative data, should Dalton accept the special order? a. Cost per unit a. Should Dalton accept the special order? b. Cost per unit b. Should Dalton accept the special order? b. Sunny offered to buy a…arrow_forward
- Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Number of Direct Labor Hours Machine Hours Product Units Per Unit Per Unit Blinks 972 4 4 Dinks 1,877 3 9 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $114,400. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $94,200. Ramapo Company uses a single plantwide overhead rate to apply all factory overhead costs based on direct labor hours. The factory overhead allocated per unit of Blink is Oa. S10.75 Оb. 565.74 Oc. S87.64 Od. $376.85arrow_forwardMickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials-X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Standard Labor Time Product X442 Y661 Sintering Finishing Alpha6 3.0 kilos 2.0 liters 0.40 hours 1.00 hours Zeta7 5.0 kilos 5.0 liters 0.50 hours 1.20 hours Information relating to materials purchased and materials used in production during May follows: Purchase Standard Used in Material Purchases Cost Price Production 15,700 kilos 16,700 liters $51,810 $20,040 $3.10 per kilo $1.30 per liter 10,200 kilos 14,700 liters X442 Y661 The following additional information is available: a. The company recognizes price variances when materials are purchased. b. The standard labor rate is $23.00 per hour in Sintering and $21.50 per hour in Finishing. c. During May, 1,450 direct labor-hours were…arrow_forwardTie-dye Lights makes two products: Party and Holiday. It takes 80,900 direct labor hours to manufacture the Party Line and 93,500 direct labor hours to manufacture the Holiday Line. Overhead consists of P225,000 in the machine setup cost pool and P149,960 in the packaging cost pool. The machine setup pool has 52,000 setups for the Party product and 98,000 setups for the Holiday product. The packaging cost pool has 26,000 parts in the Party product and 39,200 parts for the Holiday product. Using the traditional cost method of direct labor hours, what is the predetermined overhead rate?arrow_forward
- Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Standard Premium Units produced Production runs per quarter 11,600 50 2,900 25 Direct materials cost per unit $ 30 50 $ 64 75 Direct labor cost per unit Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material inspection. Data on manufacturing overhead for a representative quarter follow: Supervision Setup labor Incoming inspection Total overhead $ 239,250 278,400 200,100 $ 717,750 Required: a. Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter? b. The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: direct labor cost for supervision, production runs for setup labor, and direct material dollars for incoming…arrow_forwardRamapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Product Number ofUnits Direct Labor HoursPer Unit Machine HoursPer Unit Blinks 984 2 7 Dinks 2,096 8 7 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $107,300. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $85,100. Ramapo Company uses a single plantwide overhead rate to apply all factory overhead costs based on direct labor hours. The factory overhead allocated per unit of Blinks isarrow_forwardBecton Labs, Inc., produces various chemical compounds for Industrial use. One compound, called Fludex, Is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows: standard Quantity or Hours standard Price Standard or Rate $18.00 per ounce $14.00 per hour Cost Direct materials 2.40 ounces $ 43.20 Direct labor 0.70 hours 9.80 variable manufacturing overhead 0.70 hours $ 3.00 per hour 2.10 Total standard cost per unit $ 55.10 During November, the following activity was recorded related to the production of Fludex: a. Materials purchased, 12,000 ounces at a cost of $198,000. b. There was no beginning inventory of materials; however, at the end of the month, 3,200 ounces of materilal remalned In ending Inventory. c. The company employs 20 lab technicians to work on the production of Fludex. During November, they each worked an average of 160 hours at an average pay rate of $12.00 per hour. d. Varlable manufacturing…arrow_forward
- Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below. Product Number ofUnits Direct Labor Hoursper Unit Machine Hoursper Unit Rings 1,080 7 7 Dings 2,050 5 9 All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $84,700. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $72,600. Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours. The Assembly Department's factory overhead rate isarrow_forwardHandy Leather, Inc., produces three sizes of sports gloves: small, medium, and large. A glove pattern is first stenciled onto leather in the Pattern Department. The stenciled patterns are then sent to the Cut and Sew Department, where the glove is cut and sewed together. Handy Leather uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows: Pattern Department overhead $142,000 Cut and Sew Department overhead 235,000 Total $377,000 The direct labor estimated for each production department was as follows: Pattern Department 2,000 direct labor hours Cut and Sew Department 2,500 Total 4,500 direct labor hours Direct labor hours are used to allocate the production department overhead to the products. The direct labor hours per unit for each product for each production department were obtained from the engineering records as follows: Production Departments…arrow_forwardMedical Tape makes two products: Generic and Label. It estimates it will produce 404,444 units of Generic and 656,000 of Label, and the overhead for each of its cost pools is as follows: Estimated Cost Pool Overhead Material Receipts $126,000 Machine Setups 325,000 Assembly 585,000 Inspection 330,000 Total $1,366,000 It has also estimated the activities for each cost driver as follows: Driver Generic Label Inspections 450 650 Requisitions 400 1,000 Parts 250 400 Setups 300 350 How much is the overhead allocated to each unit of Generic and Label? Do not round intermediate computations and round your answers to two decimal places. Generic Label Cost per unit $arrow_forward
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