Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 12, Problem 18P
Problem 4-21A Allocation to accomplish smoothing
Velez Corporation estimated its overhead costs would be $50,000 per month except for January when it pays the $30,000 annual insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $80,000 ($30,000 + $50,000). The company expected to use 7,000 direct labor hours per month except during July, August, and September when the company expected 9,000 hours of direct labor each month to build inventories for high demand that normally occurs during the Christmas season. The company’s actual direct labor hours were the same as the estimated hours. The company made 3,500 units of product in each month except July, August, and September, in which it produced 4,500 units each month. Direct labor costs were $30 per unit, and direct materials costs were $25 per unit.
Required
- a. Calculate a predetermined overhead rate based on direct labor hours.
- b. Determine the total allocated overhead cost for January, March, and August.
- c. Determine the cost per unit of product for January, March, and August.
- d. Determine the selling price for the product, assuming that the company desires to earn a gross margin of $20 per unit.
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Question 6
View Policies
Current Attempt in Progress
Crane Company determines that 59000 pounds of direct materials are needed for production in July. There are 3700
pounds of direct materials on hand at July 1 and the desired ending inventory is 3300 pounds. If the cost per unit of
direct materials is $3, what is the budgeted total cost of direct materials purchases?
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O $178200.
O $173400.
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Problem 4-21A (Algo) Allocation to accomplish smoothing LO 4-1, 4-2, 4-3
Campbell Corporation estimated its overhead costs would be $22,800 per month except for January when it pays the $107,700 annual
insurance premium on the manufacturing facility. Accordingly, the January overhead costs were expected to be $130,500 ($107,700 +
$22,800). The company expected to use 7,300 direct labor hours per month except during July, August, and September when the
company expected 9,100 hours of direct labor each month to build inventories for high demand that normally occurs during the
Christmas season. The company's actual direct labor hours were the same as the estimated hours. The company made 3,650 units of
product in each month except July, August, and September, in which it produced 4,550 units each month. Direct labor costs were
$23.10 per unit, and direct materials costs were $10.00 per unit.
Required
a. Calculate a predetermined overhead rate based on direct labor hours.
b. Determine the…
Question 1 Part II
Advent Corporation started to produce automated garbage bins. The company uses a standard cost system and determines that it should take two hours of direct labour to produce one garbage bin.The normal production capacity for the company’s bins is 62,500 units per year. The total budgetedoverhead at normal capacity is $450,000 comprised of $200,000 of variable costs and $250,000 of fixedcosts. Advent Corporation applies overhead on the basis of direct labour hours.During the current year, Advent Corporation produced 95,000 bins, worked 99,000 direct labour hours,and incurred variable overhead costs of $265,000 and fixed overhead costs of $326,200.
Required:a. Compute the predetermined variable overhead rate and the predetermined fixed overhead rate.b. Compute the applied overhead for Advent for the year. c. Compute the total overhead variance.
Chapter 12 Solutions
Survey Of Accounting
Ch. 12 - 1.What is a cost object? Identify four different...Ch. 12 - Prob. 2QCh. 12 - 3.If the cost object is a manufactured product,...Ch. 12 - Prob. 4QCh. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Prob. 9QCh. 12 - 10.Why are some manufacturing costs not directly...
Ch. 12 - Prob. 11QCh. 12 - 12.On January 31, the managers of Integra, Inc....Ch. 12 - 13.Respond to the following statement: The...Ch. 12 - Prob. 14QCh. 12 - Define the term cost pool. How are cost pools...Ch. 12 - LO 4-1Exercise 4-1A Direct versus indirect costs...Ch. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Exercise 4-4APooling overhead cost Ware...Ch. 12 - Prob. 5ECh. 12 - Exercise 4-5A Allocating overhead cost among...Ch. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Exercise 4-6AAllocating overhead costs among...Ch. 12 - Exercise 4-9AAllocating to solve a timing problem...Ch. 12 - Prob. 11ECh. 12 - Exercise 4-11AHow the allocation of fixed cost...Ch. 12 - Prob. 13ECh. 12 - Problem 4-17A Cost accumulation and allocation...Ch. 12 - Problem 4-18A Selecting an appropriate cost driver...Ch. 12 - Problem 4-19A Cost allocation in a service...Ch. 12 - Prob. 17PCh. 12 - Problem 4-21A Allocation to accomplish smoothing...Ch. 12 - Problem 4-22A Allocating indirect costs between...Ch. 12 - Prob. 20PCh. 12 - Prob. 1ATCCh. 12 - Prob. 2ATCCh. 12 - ATC 4-3 Research Assignment Using real-world data...Ch. 12 - Prob. 4ATCCh. 12 - Prob. 5ATC
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