1. Should EcoScape use process costing or job-order costing?Job-order costing2. If EcoScape uses a normal costing system and overhead is applied on the basis of direct labor hours,What is the overhead rate? Round your answer to the nearest cent.per direct labor hourWhat is the average actual wage rate?per direct labor hourWhat is the cost of an installation that takes $3,650 of direct materials and 20 direct labor hours? Characteristics of Production Process, Cost MeasurementVince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different,requiring different materials and labor for installing the systems. EcoScape estimated the following for the year:Number of direct labor hours6,530Direct labor cost$65,300Overhead cost$50,281During the year, the following actual amounts were experienced:Number of direct labor hours6,145Direct labor incurred$67,595Overhead incurred$52,152.62

The pre determined overhead rate is calculated as estimated overhead cost divided by estimated base…

2. If EcoScape uses a normal costing system and overhead is applied on the basis of direct labor ho What is the overhead rate? Round your answer to the nearest cent. per direct labor hour What is the average actual wage rate? per direct labor hour What is the cost of an installation that takes $3,650 of direct materials and 20 direct labor hours?

2. If EcoScape uses a normal costing system and overhead is applied on the basis of direct labor ho What is the overhead rate? Round your answer to the nearest cent. per direct labor hour What is the average actual wage rate? per direct labor hour What is the cost of an installation that takes $3,650 of direct materials and 20 direct labor hours?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 11E: Ripley, Inc., costs products using a normal costing system. The following data are available for...

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Similar questions

Which of the following product situations is better suited to job order costing than to process costing? A. Each product batch is exactly the same as the prior batch. B. The costs are easily traced to a specific product. C. Costs are accumulated by department. D. The value of work in process is based on assigning standard costs.
Activity-based costing systems: A. use a single predetermined overhead rate based on machine hours instead of on direct labor B. frequently increase the overhead allocation to at least one product while decreasing the overhead allocation to at least one other product C. limit the number of cost pools D. always result in an increase of at least one products selling price
San Mateo Optics, Inc., specializes in manufacturing lenses for large telescopes and cameras used in space exploration. As the specifications for the lenses are determined by the customer and vary considerably, the company uses a job-order costing system. Manufacturing overhead is applied to jobs on the basis of direct labor hours, utilizing the absorption- or full-costing method. San Mateos predetermined overhead rates for 20x1 and 20x2 were based on the following estimates. Jim Cimino, San Mateos controller, would like to use variable (direct) costing for internal reporting purposes as he believes statements prepared using variable costing are more appropriate for making product decisions. In order to explain the benefits of variable costing to the other members of San Mateos management team, Cimino plans to convert the companys income statement from absorption costing to variable costing. He has gathered the following information for this purpose, along with a copy of San Mateos 20x1 and 20x2 comparative income statement. San Mateo Optics, Inc. Comparative Income Statement For the Years 20x1 and 20x2 San Mateos actual manufacturing data for the two years are as follows: The companys actual inventory balances were as follows: For both years, all administrative expenses were fixed, while a portion of the selling expenses resulting from an 8 percent commission on net sales was variable. San Mateo reports any over-or underapplied overhead as an adjustment to the cost of goods sold. Required: 1. For the year ended December 31, 20x2, prepare the revised income statement for San Mateo Optics, Inc., utilizing the variable-costing method. Be sure to include the contribution margin on the revised income statement. 2. Describe two advantages of using variable costing rather than absorption costing. (CMA adapted)
Exotic Engine Shop uses a job order cost system to determine the cost of performing engine repair work. Estimated costs and expenses for the coming period are as follows: The average shop direct labor rate is 37.50 per hour. Determine the predetermined shop overhead rate per direct labor hour.
Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units of Simple and 146,100 of Removable, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: Â How much is the overhead allocated to each unit of Simple and Removable?
Caseys Kitchens three cost pools and overhead estimates are as follows: Compare the overhead allocation using: A. The traditional allocation method B. The activity based costing method (Hint: the traditional method uses machine hours as the allocation base.)
Overhead costs are assigned to each product based on __________________. A. the proportion of that products use of the cost driver B. a predetermined overhead rate for a single cost driver C. price of the product D. machine hours per product
Under what two conditions would the multiple production department factory overhead rate method provide more accurate product costs than the single plantwide factory overhead rate method?
Job order cost sheets show the following costs assigned to each job: The company assigns overhead at twice the direct labor cost. What is the total cost for each job?
Under what two conditions would the multiple production department factory overhead rate method provide more accurate product costs than the single plantwide factory overhead rate method?
Consider the information given on two products and their usage of two overhead activities (setups and inspection): Suppose that machine hours are used to assign all overhead costs to the two products. Which of the following is the best answer? a. Deluxe mowers are undercosted, and regular mowers are overcosted. b. Deluxe mowers and regular mowers are accurately costed. c. Deluxe mowers are overcosted, and regular mowers are undercosted. d. Using inspection hours to assign overhead costs is the best allocation approach.
The management of Gwinnett County Chrome Company, described in Problem 1A, now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows: Instructions 1. Determine the multiple production department factory overhead rates, using direct labor hours for the Stamping Department and machine hours for the Plating Department. 2. Determine the product factory overhead costs, using the multiple production department rates in (1).