Transcribed Image Text:A furniture-making business manufactures quality furniture to customers orders. It has three production departments (A, B and C) which have overhead absorption rates (per direct labour hour) of $12.86, $12.40 and $14.03 respectively. Two pieces of furniture are to be manufactured for customers. Direct costs are as follows. Job MNO Direct material Direct labour Job XYZ $154 20 hours dept A 12 hours dept B 10 hours dept C $108 16 hours dept A 10 hours dept B 14 hours dept C Labour rates are as follows: $3.80(A): $3.50 (B); $3.40 (C) Calculate the total cost of cach job the selling price if there is a markup of 25%
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- Transcribed Image Text:A furniture-making business manufactures quality furniture to customers orders. It has three production departments (A, B and C) which have
overhead absorption rates (per direct labour hour) of $12.86, $12.40 and $14.03 respectively. Two pieces of furniture are to be manufactured for customers. Direct costs are as follows. Job MNO Direct material Direct labour Job XYZ $154 20 hours dept A 12 hours dept B 10 hours dept C $108 16 hours dept A 10 hours dept B 14 hours dept C Labour rates are as follows: $3.80(A): $3.50 (B); $3.40 (C) Calculate the total cost of cach job the selling price if there is a markup of 25%
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- Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hoursAssigning Costs to Activities 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 $550,000. 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 45 % Processing payment 45 % 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 $ Resolving discrepancies $ Processing payment $Job Costing - T Accounts Practice Problem 8 A furniture-making business manufactures quality furniture to customers' orders. It has three production departments (A, B and C) which have overhead absorption rates (per direct labour hour) of $12.86, $12.40 and $14.03 respectively. Two pieces of furniture are to be manufactured for customers. Direct costs are as follows. Job XYZ Job MNO Direct material Direct labour $154 20 hours dept A 12 hours dept B 10 hours dept C $108 16 hours dept A 10 hours dept B 14 hours dept C Labour rates are as follows: $3.80(A): $3.50 (B): $3.40 (C) Calculate the total cost of each job.
- Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. Overhead Direct LaborHours (dlh) Product A B Painting Dept. $248,000 10,000 dlh 16 dlh 4 dlh Finishing Dept. 72,000 10,000 4 16 Totals $320,000 20,000 dlh 20 dlh 20 dlh Using a single plantwide rate, determine the overhead rate per unit for Blue Ridge Marketing Inc.'s Product B.Practice Example 1: White Company has two departments, Cutting and Finishing. The company uses a job-order cost system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor cost. At the beginning of the year, the company made the following estimates: Department Direct labor-hours Machine-hours Manufacturing overhead cost Direct labour cost Cutting 6,000 48,000 Rs360,000 Rs50,000 Finishing 30,000 5,000 Rs486,000 Rs270,000 Required: 1. Compute the predetermined overhead rate to be used in each department. 2. Assume that the overhead rates that you computed in (1) above are in effect. The job cost sheet for job 203, which was started and completed during the year, showed the following: Cutting 6 80 Rs500 Rs70 Department Finishing 20 4 Rs310 Rs150 Direct labor-hours Machine-hours Materials requisitioned Direct labor cost Compute the total overhead cost applied to Job…Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory o following table presents information about estimated overhead and direct labor hours. Overhead $258,300 65,600 $323,900 Direct Labor Hours (dih) 8 Painting Dept. 8 dih Finishing Dept. 7 Totals 15 dih Using a single plantwide rate, the factory overhead allocated per unit of Product B is Oa. $107.63 Ob. $240.45 Oc. $144.27 Od. $16.03 9,600 dih Product 10,600 20,200 dih A S 9 dih
- Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. Direct Product Overhead Labor Hours (dlh) A B Painting Dept. $258,100 10,500 dlh 3 dlh 12 dlh Finishing Dept. 88,100 10,400 5 7 Totals $346,200 20,900 dlh 8 dlh 19 dlh Using a single plantwide rate, the factory overhead allocated per unit of Product B is Oa. $73.74 Ob. $314.64 Oc. $16.56 Od. $132.48Appendix 4B) Assigning Support Department Costs by Using the Direct Method Quillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to Quillen: Support Departments Producing Departments S1 S2 Cutting Sewing Direct costs $180,000 $150,000 $122,000 $90,500 Normal activity: Number of employees — 30 63 147 Maintenance hours 1,200 — 16,000 4,000 Required: 1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratios—one for Cutting and the other for Sewing.) Enter your answers as decimal values. S1 S2 Cutting Sewing 2. Allocate the support department costs to the producing departments by using the direct method. Use a…Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. Overhead DirectLabor Hours (dlh) Product A B Painting Dept. $248,000 10,000 dlh 16 dlh 4 dlh Finishing Dept. 72,000 10,000 4 16 Totals $320,000 20,000 dlh 20 dlh 20 dlh The factory overhead allocated per unit of Product B in the Painting Department if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is a.$64.00 per unit b.$28.80 per unit c.$99.20 per unit d.$49.60 per unit
- Goodwill LLC manufacturing two products, A and B. The company currently adopts traditional method of charging overheads to the products based on labour hours. The company now wishes to adopt the Activity Based Costing method of allocating overheads, to do its product costing accurately. The company furnishes the following data for a year: Product A Product B Direct material @ RO 5 per Kg 6 Kgs 5 Kgs Direct Labour @ RO 10 per hour 4.5 hours 5 hours Product Annual Output (units) Total machine hours Total number of purchase orders Total number of set ups A 100 500 50 5 B 75 700 40 10 The annual overheads are as under: Volume related activity costs RO 20,000 Set up related costs RO 15,000 Purchase related costs RO 35,000 Total RO 70,000 Based on the above information,…Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. Overhead DirectLabor Hours (dlh) Product A B Painting Dept. $374,640 11,200 dlh 16 dlh 2 dlh Finishing Dept. 100,440 8,100 7 17 Totals $475,080 19,300 dlh 23 dlh 19 dlh The overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is a.$622.00 per unit b.$33.45 per unit c.$277.70 per unit d.$12.40 per unitQuillen Company manufactures a product in a factory that has two production departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to Quillen: Direct costs Normal activity: Number of employees Maintenance hours 1 Support Departments 2 S1 S2 Cutting $180 000 $150 000 $122 000 1 200 Production Departments 30 63 16 000 Sewing $90 500 147 Refer to the information for Quillen Company above. Now assume that Quillen uses the sequential method to allocate support department costs. S1 is allocated first, then S2. Required: 4 000 Calculate the cost assignment ratios to be used under the sequential method for S2, Cutting and Sewing. Carry out your answers to four decimal places. Allocate the overhead costs to the production departments by using the sequential method.