Managerial Accounting: Creating Value in a Dynamic Business Environment
Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 3, Problem 24E

The controller for Tender Bird Poultry, Inc. estimates that the company’s fixed overhead is $100,000 per year. She also has determined that the variable overhead is approximately $.10 per chicken raised and sold. Since the firm has a single product, overhead is applied on the basis of output units, chickens raised and sold.

Required:

  1. 1. Calculate the predetermined overhead rate under each of the following output predictions: 200,000 chickens, 300,000 chickens, and 400,000 chickens.
  2. 2. Does the predetermined overhead rate change in proportion to the change in predicted production? Why?
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The controller for Tender Bird Poultry, Inc. estimates that the company’s fixed overhead is $100,000 per year. She also has determined that the variable overhead is approximately $.10 per chicken raised and sold. Since the firm has a single product, overhead is applied on the basis of output units, chickens raised and sold.Required:1. Calculate the predetermined overhead rate under each of the following output predictions: 200,000 chickens, 300,000 chickens, and 400,000 chickens.2. Does the predetermined overhead rate change in proportion to the change in predicted production? Why?
The controller for Tender Bird Poultry, Inc., estimates that the company’s fixed overhead is $100,000 per year. She also has determined that the variable overhead is approximately $0.20 per chicken raised and sold. Since the firm has a single product, overhead is applied on the basis of output units, chickens raised and sold. 1. Calculate the predetermined overhead rate under each of the following output predictions: (Round your answers to 2 decimal places.) 200,000  -  300,000 - 400,000 -
Norwall Company’s variable manufacturing overhead should be $3.00 per standard machine-hour and itsfixed manufacturing overhead should be $300,000 per period.The following information is available for a recent period:a. The denominator activity of 60,000 machine-hours is used to compute the predetermined overhead rate.b. At the 60,000 standard machine-hours level of activity, the company should produce 40,000 unitsof product.c. The company’s actual operating results were:Number of units produced .................................... 42,000Actual machine-hours ........................................... 64,000Actual variable overhead cost .............................. $185,600Actual fixed overhead cost ................................... $302,400Required:1. Compute the predetermined overhead rate and break it down into variable and fixed cost elements.2. Compute the standard hours allowed for the actual production.3. Compute the variable overhead rate and efficiency variances and the…

Chapter 3 Solutions

Managerial Accounting: Creating Value in a Dynamic Business Environment

Ch. 3 - Prob. 11RQCh. 3 - Describe the process of two-stage cost allocation...Ch. 3 - Define each of the following terms, and explain...Ch. 3 - Describe how job-order costing concepts are used...Ch. 3 - What is meant by the term cost driver? What is a...Ch. 3 - Describe the flow of costs through a...Ch. 3 - Give an example of how a hospital, such as the...Ch. 3 - Why are some manufacturing firms switching from...Ch. 3 - What is the cause of over applied or under applied...Ch. 3 - Briefly describe two ways of closing out over...Ch. 3 - Describe how a large retailer such as Lowes would...Ch. 3 - Prob. 22RQCh. 3 - For each of the following companies, indicate...Ch. 3 - The controller for Tender Bird Poultry, Inc....Ch. 3 - Finley Educational Products started and finished...Ch. 3 - Bodin Company manufactures finger splints for kids...Ch. 3 - McAllister, Inc. employs a normal costing system....Ch. 3 - Garrett Toy Company incurred the following costs...Ch. 3 - Crunchem Cereal Company incurred the following...Ch. 3 - Prob. 31ECh. 3 - Selected data concerning the past years operations...Ch. 3 - Sweet Tooth Confectionary incurred 157,000 of...Ch. 3 - The following information pertains to Trenton...Ch. 3 - The following data pertain to the Oneida...Ch. 3 - Refer to the data for the preceding exercise for...Ch. 3 - Design Arts Associates is an interior decorating...Ch. 3 - Suppose you are the controller for a company that...Ch. 3 - Laramie Leatherworks, which manufactures saddles...Ch. 3 - Refer to Exhibit 312, which portrays the three...Ch. 3 - Refer to the illustration of overhead application...Ch. 3 - The following data refer to Twisto Pretzel Company...Ch. 3 - Burlington Clock Works manufactures fine,...Ch. 3 - Perfecto Pizza Company produces microwavable...Ch. 3 - Stellar Sound, Inc. which uses a job-order costing...Ch. 3 - Finlon Upholstery, Inc. uses a job-order costing...Ch. 3 - JLR Enterprises provides consulting services...Ch. 3 - Garcia, Inc. uses a job-order costing system for...Ch. 3 - MarineCo, Inc. manufactures outboard motors and an...Ch. 3 - The following data refers to Huron Corporation for...Ch. 3 - Refer to the schedule of cost of goods...Ch. 3 - Marco Polo Map Companys cost of goods sold for...Ch. 3 - Midnight Sun Apparel Company uses normal costing,...Ch. 3 - Marc Jackson has recently been hired as a cost...Ch. 3 - Troy Electronics Company calculates its...Ch. 3 - Tiana Shar, the controller for Bondi Furniture...Ch. 3 - Scholastic Brass Corporation manufactures brass...Ch. 3 - Refer to the preceding problem regarding...Ch. 3 - Prob. 59PCh. 3 - TeleTech Corporation manufactures two different...Ch. 3 - CompuFurn, Inc. manufactures furniture for...Ch. 3 - FiberCom, Inc., a manufacturer of fiber optic...
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