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3204 WordsApr 6, 201513 Pages
1-Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information. Total estimated oh cost for the two product lines are 770,000. Car Truck SOL FOR A) DL.hours for car wheels=40,000*1=40,000 Estimated wheels produced 40,000 30,000 dl hours for t. wheels= 10,000*3=30,000 ( 70,000 tot.dl hours.) DL Hour per wheels 1 3 770,000/70,000=11$per dl hours. Oh assigned= for car w. 40,000*11=440,000 truck: 30,000*11=330,000 Total OH= 770,000(440,000+330,000)…show more content…
b) Assign the manufacturing OH costs for April to the two pro.using activity based costing. Solution: a) b) for instrmnts: Requisition= 400*40= 16,000 for gauges= 600*40=24,000 T.Cost Assign=40,000 for Inst. Setups= 200*55=11,000 for gauges= 300*55=16,500 sum them up for tca for inst. insp= 200*45=9000 for gauges= 400*45=18,000 sum them up for tca Units produced= instrument= 50 and gauges 300 OH for per unit= 16,000+11,000+9,000/ 50 and sum of all for gauges/300 4) FireOut, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multipurpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hrs. x (54,000 + 10,200)]. Expected annual manufacturing overhead is $1,557,480. Thus, the predetermined overhead rate is $16.17 or ($1,557,480 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models.The company’s managers
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