Wanda Instrumentation produces navigational equipment for ships, aircraft (both staffed and drones), and land vehicles. The parts are produced to specification by their customers. Depending on the customer and the type of job, the customer pays according to the terms of either a "fixed-price" contract (the price does not depend directly on the cost of the job) or of a "cost-plus contract (the price is equal to recorded cost plus a fixed feel Wanda expects only two clients (vanhoe Aviation and Rolf's Shipyard) in Year 2. The work done for Ivanhoe will all be done under cost-plus contracts while the work done for Rolf's will all be done under fixed-price contracts. Selected budget data for Year 2 include the following: Direct laber cost (seee) Direct materials cost (s000) Manufacturing overhead (seee) Ivanhoe Aviation $ 750 1,872 Rolf's Shipyard Unassigned $2,250 1,728 $ 7,020 Required: a. Compute the predetermined rate assuming that Wanda Instrumentation uses direct labor costs to apply overhead b. Compute the predetermined rate assuming that Wanda Instrumentation uses direct materials cost to apply overhead. Complete this question by entering your answers in the tabs below. Required A Required B Compute the predetermined rate assuming that Wanda Instrumentation uses direct labor costs to apply overhead. Applica % of direct labor cost
Wanda Instrumentation produces navigational equipment for ships, aircraft (both staffed and drones), and land vehicles. The parts are produced to specification by their customers. Depending on the customer and the type of job, the customer pays according to the terms of either a "fixed-price" contract (the price does not depend directly on the cost of the job) or of a "cost-plus contract (the price is equal to recorded cost plus a fixed feel Wanda expects only two clients (vanhoe Aviation and Rolf's Shipyard) in Year 2. The work done for Ivanhoe will all be done under cost-plus contracts while the work done for Rolf's will all be done under fixed-price contracts. Selected budget data for Year 2 include the following: Direct laber cost (seee) Direct materials cost (s000) Manufacturing overhead (seee) Ivanhoe Aviation $ 750 1,872 Rolf's Shipyard Unassigned $2,250 1,728 $ 7,020 Required: a. Compute the predetermined rate assuming that Wanda Instrumentation uses direct labor costs to apply overhead b. Compute the predetermined rate assuming that Wanda Instrumentation uses direct materials cost to apply overhead. Complete this question by entering your answers in the tabs below. Required A Required B Compute the predetermined rate assuming that Wanda Instrumentation uses direct labor costs to apply overhead. Applica % of direct labor cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Wanda Instrumentation produces navigational equipment for ships, aircraft (both staffed and drones), and land vehicles. The parts are
produced to specification by their customers. Depending on the customer and the type of job, the customer pays according to the
terms of either a "fixed-price" contract (the price does not depend directly on the cost of the job) or of a "cost-plus" contract (the price
is equal to recorded cost plus a fixed feel. Wanda expects only two clients (vanhoe Aviation and Rolf's Shipyard) in Year 2. The work
done for Ivanhoe will all be done under cost-plus contracts while the work done for Rolf's will all be done under fixed-price contracts.
Selected budget data for Year 2 include the following:
Direct laber cost (seee)
Direct materials cost (1000)
Manufacturing overhead (seee)
Ivanhoe
Aviation
$ 750
1,872
Rolf's
Shipyard Unassigned
$2,250
1,728
$7,020
Required:
a. Compute the predetermined rate assuming that Wanda Instrumentation uses direct labor costs to apply overhead.
b. Compute the predetermined rate assuming that Wanda Instrumentation uses direct materials cost to apply overhead.
Required B
Complete this question by entering your answers in the tabs below.
Required A
Compute the predetermined rate assuming that Wanda Instrumentation uses direct labor costs to apply overhead.
Application rate
% of direct labor cost
Required>
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