chapter 4 handout

A furniture corporation manufactures two models of furniture—Standard and Deluxe. The total estimated manufacturing overhead costs are $64,200. The following estimates are available: Standard $250 Direct materials cost per unit $125 Direct labor cost per unit 240 Number of units Deluxe $290 Direct materials cost per unit $140 Direct labor cost per unit 600 Number of units The company uses direct labor costs as the base to allocate manufacturing overhead. Calculate the

(125 x 240units) + (140 x 600units)=114,000 64,200/114,000=56.32%

Whirlwind Fan Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan has 20 separate parts. The direct material cost is $90, and each ceiling fan requires 2.50 hours of machine time to manufacture. Additional information is as follows: Activity Allocation Base Predetermined Overhead Allocation Rate Materials handling Number of parts $ 0.04 Machining Machine hours 6.00 Assembling Number of parts 0.20 Packaging Number of finished units 2.50 What is the cos

0.04 x parts 0.04 x 20= 0.8

1 Bag Ladies, Inc. manufactures two kinds of bags—totes and satchels. The company allocates manufacturing overhead using a single plantwide rate with direct labor cost as the allocation base. Estimated overhead costs for the year are $25,500. Additional estimated information is given below. totes: DM cost p/= 33 DL cost p/= 53 # units = 530 satchels DM cost p/= 40 DL cost p/= 61 # units = 360 Calculate the amount of overhead to be allocated to Totes. (Round any percentages to two decimal p

allocation base= direct labor (53) totes: 53 x 530 = 28090 satchels: 61 x 360 = 21960 total = 50050 pre-d oh all. rate= 25,500/50,050= 50.95 manu OH totes= 28,090 x 50.95% = 14,312

Bar None Legal Services, Inc. is a consulting firm that offers optimal legal solutions. It allocates indirect costs using a single predetermined overhead allocation rate with direct labor hours as the allocation base. The estimated indirect costs for this year amount to $170,000. The company is expected to work 17,000 direct labor hours during the year. The direct labor rate is $200 per hour. Clients are billed at 130% of direct labor cost. Last month, Bar None's consultants spent 180 hours on H

calculate total costs assigned and allocated to henderson: pred oh allo= 170,000/17,000=10 direct labor: 200x180= 36000 180 x 10 = 1800 36000+1800= 37800

Blade Breeze Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan has 20 separate parts. The direct materials cost is $70, and each ceiling fan requires 2.50 hours of machine time to manufacture. Additional information is as follows: Activity Allocation Base Predetermined Overhead Allocation Rate Materials handling Number of parts $ 0.08 Machining Machine hours 7.20 Assembling Number of parts 0.35 Packaging Number of finished units 2.80 What is the cost

hours x cost per hour 2.5 x 7.2 = 18

Mendburg, Inc. is a consulting firm that offers optimal legal solutions. It allocates indirect costs using a single predetermined overhead allocation rate with direct labor hours as the allocation base. The estimated indirect costs for this year amount to $100,000. The company is expected to work 5000 direct labor hours during the year. The direct labor rate is $250 per hour. Clients are billed at 130% of direct labor cost. Last month, Mendburg's consultants spent 175 hours on Curelli, Inc. Calc

labor hours=base 100,000/5000= 20 REVENUE : 250 x 175 x 130% = 56875 DIRECT LABOR: 175 x 250 = 43750 INDIRECT COSTS: 175 x 20 = 3500 OPERATING INCOME: 56875 - 3500 - 43750 = 9625

Treasurers, Inc., a manufacturer of gift articles, uses a single plantwide rate to allocate indirect costs with machine hours as the allocation base. Estimated overhead costs for the year are $6,000,000. Estimated machine hours are 29,000. During the year, the actual machine hours used were 50,000. Calculate the predetermined overhead allocation rate. (Round your answer to the nearest dollar.) A) $120 B) $88 C) $207 D) $63

predetermined oh allocation rate = 6,000,000/29000 206.7 --> 207

Stealth, Inc. produces two types of drones, rotary and fixed wing. Stealth estimated $765,000 of manufacturing overhead, and 51,000 machine hours for the year. The allocation base for overhead costs is machine hours.The rotary model actually consumed 21,000 machine hours, and the fixed wing type consumed 30,000 machine hours. How much overhead is allocated to the fixed wing model? A) $315,000 B) $450,000 C) $210,000 D) $150,000

predetermined oh rate= 765,000/51,000= 15 oh allocated= 15 x 30,000 = 450,000

Tungsten, Inc. manufactures both normal and premium tube lights. The company allocates manufacturing overhead using a single plantwide rate with machine hours as the allocation base. Estimated overhead costs for the year are $102,000. Additional estimated information is given below. Normal Machine hours (MHr) 24,000 Direct materials $51,000 Premium Machine hours (MHr) 39,000 Direct materials $480,000 Calculate the predetermined overhead allocation rate. (Round your answer to the nearest cent

so this one is tricky this one we know our base is machine hours but for normal or premium? since it doesnt specify, we add up normal and premium machine hours 24000+39000=63000 and then we calculate, 102,000/63,000= 1.62 (B) 1.62

Nourishmix, Inc. manufactures food processors. The target sales price is $420 per unit. The company desires a 30% net profit margin on its products. What is the company's target full-product cost per unit using target pricing? A) $126 B) $546 C) $714 D) $294

target sales price= 420 desire 30% net profit 420 x 0.30=294