Discussion QuestionEpsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on apercentage of direct labor cost. At the beginning of 2018, they estimated total manufacturingoverhead costs at $1,015,000, and they estimated total direct labor costs at $1,400,00o.The administration and selling overheads are to be absorbed in each job cost at 15% of productioncost. Distribution cost should be added to each job according to quotes from outside carriagecompanies.Thecompanywishes to quote for job # W5oo. Data for the job are as follows:Direct materials cost$169,450Direct labour cost$230,000Direct labour hours400 hoursSpecial Design CostDistribution quote from haulage companyUnits of product produced$12,300$17,930250 cratesa) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for2018.b) How much manufacturing overhead was allocated to Job #W5o0?c) Calculate the total cost & quotation price of Job #W500, given that a margin of 25% is applied.d) How much was the production cost per unit (cost per crate) of finished product?

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Description: Discussion QuestionEpsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on apercentage of direct labor cost. At the beginning of 2018, they estimated total manufacturingoverhead costs at $1,015,000, and they estimated

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Discussion Question Epsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2018, they estimated total manufacturing overhead costs at $1,015,000, and they estimated total direct labor costs at $1,400,000. The administration and selling overheads are to be absorbed in each job cost at 15% of production cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The company wishes to quote for job # W500. Data for the job are as follows: Direct materials cost $169,450 Direct labour cost $230,000 Direct labour hours 400 hours Special Design Cost Distribution quote from haulage company Units of product produced $12,300 $17,930 250 crates a) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for 2018. b) How much manufacturing overhead was allocated to Job #W500? c) Calculate the total cost & quotation price of Job #W500, given that a margin of 25% is applied. d) How much was the production cost per unit (cost per crate) of finished product?

Discussion Question Epsilon Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2018, they estimated total manufacturing overhead costs at $1,015,000, and they estimated total direct labor costs at $1,400,000. The administration and selling overheads are to be absorbed in each job cost at 15% of production cost. Distribution cost should be added to each job according to quotes from outside carriage companies. The company wishes to quote for job # W500. Data for the job are as follows: Direct materials cost $169,450 Direct labour cost $230,000 Direct labour hours 400 hours Special Design Cost Distribution quote from haulage company Units of product produced $12,300 $17,930 250 crates a) Compute Epsilon Manufacturing Company predetermined manufacturing overhead rate for 2018. b) How much manufacturing overhead was allocated to Job #W500? c) Calculate the total cost & quotation price of Job #W500, given that a margin of 25% is applied. d) How much was the production cost per unit (cost per crate) of finished product?

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter26: Manufacturing Accounting: The Job Order Cost System

Section: Chapter Questions

Problem 5SEB: PREDETERMINED FACTORY OVERHEAD RATE Marston Enterprises calculates a predetermined factory overhead...

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PREDETERMINED FACTORY OVERHEAD RATE Marston Enterprises calculates a predetermined factory overhead rate so that factory overhead may be applied to production during the month. It calculates the overhead using three different methods and then decides which one to use. Total estimated factory overhead costs are 600,000. Total estimated direct labor hours are 30,000. Total estimated direct labor costs are 1,200,000. Total machine hours are estimated to be 200,000. Calculate the predetermined overhead application rates based on (1) direct labor hours, (2) direct labor costs, and (3) machine hours.
PREDETERMINED FACTORY OVERHEAD RATE Millerlile Enterprises calculates a predetermined factory overhead rate so that factory overhead may be applied to production during the month. It calculates the overhead using three different methods and then decides which one to use. Total estimated factory overhead costs are 540,000. Total estimated direct labor hours are 50,000. Total estimated direct labor costs are 900,000. Total machine hours are estimated to be 80,000. Calculate the predetermined overhead application rates based on (1) direct labor hours, (2) direct labor costs, and (3) machine hours.
Applying factory overhead Bergan Company estimates that total factory overhead costs will be 620,000 for the year. Direct labor hours are estimated to be 80,000. For Bergan Company, (A) determine the predetermined factory overhead rate using direct labor hours as the activity base, (B) determine the amount of factory overhead applied to Jobs 200 and 305 in May using the data on direct labor hours from BE 16-2, and (C) prepare the journal entry to apply factory overhead to both jobs in May according to the predetermined overhead rate.
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 Budgeted direct labor expense: $1,500,000 Estimated machine hours: 100,000
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