5. Elevator Co. makes two product models, A and B, and provides both installation and inspection services for its customers. Budgeted information is as follows: Installation Inspection Total Budgeted overhead 300,000 210,000 510,000 Budgeted labor hours 2,000 3,000 5,000 Product A Product B Total Direct labor hours per unit: 2.0 1.5 5,000 Installation 1.0 0.5 2,000 Inspection 1.0 1.0 3,000 Units 1,000 2,000 3,000 The company uses a departmental method to allocate overhead in each of the two cost pools-installation and inspection. How much overhead is allocated to product A if the company uses direct labor hours as the allocation base? 220,000 140,000 300,000 290,000
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- The following data pertain to the current year:Budgeted manufacturing overhead: OMR 450,000Actual manufacturing overhead: OMR 390,000Budgeted machine hours: 30,000 hrs.Actual machine hours: 33,000 hrs.Overhead applied to production totaled: Select one: a.449,000 b.495,000 c.435,000 d.355,00014. A company is preparing its production overhead budgets and determining the apportionment of these overheads to products. Cost centres expenses and related information have been budgeted as follows: Production Cost Centre Machine Machine Dept A ($) Dept B ($) 8,586 9,190 6,400 8,700 Indirect wages Indirect materials Rental Bldg. insurance Power Air Floor space (sq. metres) Value of Total conditioning 3,400 Machine depreciation 40,200 machinery Power 78,560 16,900 16,700 The following information is also available: (kilowatt hrs) Direct labour hrs Machine hrs 2,400 8,600 Total Machine Dept A 45,000 10,000 $402,000 $201,000 $179,000 100 35,000 25,200 55 8,000 7,200 11 12,000 40 Service Cost Centre Assembly Canteen Maintenance ($) ($) ($) 6,200 000 15,674 1,200 Machine Assembly Canteen Maintenance Dept B 29,650 3 600 15,000 6,000 22,000 20,800 15,460 2,000 Required: (a) Prepare a statement showing the allocation and apportionment of overheads to the cost centres, showing clearly the…7 EB7. 4.4 A company estimates its manufacturing overhead will be $840,000 for the next year. What is the predetermined overhead rate given each of the following independent allocation bases? expense: $750,000 C. Estimated machine hours: 150,000 A. Budgeted direct labor hours: 90,615 B. Budgeted direct labor
- Task 6. The following are consumed for the production of one unit: ➤18 kg of material A (price 1 € / kg and 3 m²) material B (price 2 € / m²) Direct labour per unit of product Responsibility centre 1: 20 hours; rate 0,30€/h ==== Responsibility centre 2: 30 hours; rate 0,50€/h Calculates: Estimated (planned) variable overheads per year Responsibility centre 1: 14,000, € Direct labour 70,000 h Responsibility centre 2: 21 000, € Direct labour 180 000 h 1. variable production costs per unit 2. unit cost of production 3. full cost of one unit Estimated (planned) fixed overheads and general operating expenses per year Production costs - 100,000 € Selling expenses -30 000 € Administration expenses -15 000 €Company A produces a component used in the production of one of the company’s main products. The costs are budgeted as follows: Amount per unit (R) Amount per 5 000 units (R) Materials 5 25 000Labour 15 75 000Variable overhead 10 50 000Depreciation 4 20 000Allocated general overhead 12 60 000Total cost 46 230 000The components can be purchased from an outside supplier at a cost of R35 per unit. Required: Q.3.1 Determine whether the company should make or buy the component. In arriving at your solution clearly show all your workings, as marks will be allocated. Q.3.2 State five qualitative aspects that the company must evaluate before making a…Company A produces a component used in the production of one of the company’s main products.The costs are budgeted as follows:Amount per unit (R) Amount per 5 000 units (R)Materials 5 25 000Labour 15 75 000Variable overhead 10 50 000Depreciation 4 20 000Allocated general overhead 12 60 000Total cost 46 230 000The components can be purchased from an outside supplier at a cost of R35 per unit.Required:Q.3.2 State five qualitative aspects that the company must evaluate before making a decision in Q.3.1 above.Q.3.3 Briefly explain the difference between avoidable costs, differential costs and opportunity costs. Provide one example of each cost.Q.3.4 List two examples of scenarios where relevant costing can be used effectively in decision‐making.
- 5. A company estimates its manufacturing overhead will be $750,000 for the next year. What is the predetermined overhead rate given the following independent allocation bases? Budgeted direct labor hours: 60,000 ? per ?. Budgeted direct labor: $1,500,000 ? per ?. Estimated machine hours: 100,000 ? per ?. PLEASE NOTE: Predetermined overhead rates will be rounded to two decimal places and shown with "$" and commas as needed (i.e. $12,345.67). The rates will include their proper label according to the textbook examples (no abbreviations).The following information is available for ABC Co.: Activity Pool Setups Quality Inspection Assembly (direct labor hours) Budgeted Amount 300,000 Activity Base 400,000 600,000 120,000 2,000,000 400,000 Compute for the activity rate for set up? A. 0.75 B. 5.09 C. 6.00 D. 58.00 QRS Co. produces three products. Production and cost information show the following: PRODUCTS S Units Produced 50,000 150,000 300,000 Direct labor Number of inspections 100,000 50,000 100,000 100 300 600 The consumption ratio based on the number of inspections would be, respectively. A. 20%, 30% and 50% B. 40%, 20% and 40% C.10%, 30% and 60% D. EquallyA manufacturer uses machine hours to allocate overhead cost to products. Budgeted information for the current year follows. Budgeted overhead cost$ 108,800Budgeted machine hours1,280machine hours Overhead cost of $21.25 is allocated to a job that uses 4 machine hours. T/F
- S Craftmore Machining reports the following budgeted overhead cost and related data for this year. Activity Assembly Budgeted Cost $ 458,250 70,500 23,500 Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) Product design Electricity Budgeted Activity Usage 13,000 1,410 10,000 470 58,750 Setups $ 611,000 Setup Total Required: 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 13,000 direct labor hours. 2. Job 31 used 280 direct labor hours and Job 42 used 560 direct labor hours. Allocate overhead cost to each job using the single plantwide overhead rate from part 1. 3. Compute an activity rate for each activity using activity-based costing. 4. Allocate overhead costs to Job 31 and Job 42 using activity-based costing. Activity Cost Driver Direct labor hours (DLH) Engineering hours (EH) Machine hours (MH) Setups Required 1 Required 2 Activity Usage Job 31 280 33 60 3 Complete this question by entering your…bloii Q2. Read the following case relating to a toy manufacturing company produces two products: Product A and B and solve the questions given at the end of the case using the data. The budgeted cost information for each product is as follows. Particulars Product-A Product- B Material 30 40 Labor 20 15 Production overhead cost incurred Machine cost 300000 700000 Set up cost Quality inspection cost Total 250000 1250000 For each of product "A" and "B" we are also given the following information: Product "A" Product "B" No of units produced No production runs No of inspection 20000 40000 180 100 300 400 No of machine hours 50000 50000 Requirements: 1. Calculate the cost of each unit of product "A" and "B" under absorption (Traditional method) costing using the number of units as basis of absorption. 2. Calculate the cost of each unit of product "A" and "B" using ABC system. In this case we are required to suggest the toy company whether to adopt ABC or not.The following production overhead costs relate to a production department XY, Budget $372,000Actual $425,000Absorbed $391,000 Calculate the over or under absorbed of the overhead? show solution