Velshi Printers has contracts to complete weekly supplements required by forty - six customers. For the year 2018, manufacturing overhead cost estimates total $2,080,000 for an annual production capacity of 16 million pages.For 2018 Velshi Printers has decided to evaluate the use of additional cost pools. After analyzing manufacturing overhead costs, it was determined that number of design changes, setups, and inspections are the primary manufacturing overheadcost drivers. The following information was gathered during the analysis:Cost poolDesign changesManufacturing overhead costsActivity level100 design changes$160,000Setups1,850,0006,000 setupsInspections70,0009,000 inspectionsTotal manufacturing overhead costs$2,080,000During 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing services:ActivityMoney ManagersHospital SystemsPages90,000106,000Design changesSetupsInspections12172634Assuming activity - cost pools are used, what are the activity - cost driver rates for design changes, setups, and inspections cost pools?O A. $1,600.00 per change, $308.33 per setup, $7.78 per inspectionO B. $17.78 per change, $308.33 per setup, $700.00 per inspectionOC. $26.67 per change, $7.78 per setup, $308.33 per inspectionO D. $1,600.00 per change, $11.67 per setup, $205.56 per inspection

Name: Velshi Printers has contracts to complete weekly supplements required
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Velshi Printers has contracts to complete weekly supplements required by forty - six customers. For the year 2018, manufacturing overhead cost estimates total $2,080,000 for an annual production capacity of 16 million pages.For 2018 Velshi Printers

Introduction:- ABC costing system used allocation of overheads based on cost drivers.…

Business

Accounting

Jupplemens 1equired by forty - six customers. For the year 20 or 2018 Velshi Printers has decided to evaluate the use of additional cost pools. After analyzing manufacturing ost drivers. The following information was gathered during the analysis: Cost pool Design changes Setups nspections Total manufacturing overhead costs During 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing Activity Pages Design changes Setups Inspections Assuming activity - cost pools are used, what are the activity- cost driver rates for design changes, setups, and O A. $1,600.00 per change, $308.33 per setup, $7.78 per inspection OB. $17.78 per change, $308.33 per setup, $700.00 per inspection OC. $26.67 per change, $7.78 per setup, $308.33 per inspection O D. $1,600.00 per change, $11.67 per setup, $205.56 per inspection

Jupplemens 1equired by forty - six customers. For the year 20 or 2018 Velshi Printers has decided to evaluate the use of additional cost pools. After analyzing manufacturing ost drivers. The following information was gathered during the analysis: Cost pool Design changes Setups nspections Total manufacturing overhead costs During 2018, two customers, Money Managers and Hospital Systems, are expected to use the following printing Activity Pages Design changes Setups Inspections Assuming activity - cost pools are used, what are the activity- cost driver rates for design changes, setups, and O A. $1,600.00 per change, $308.33 per setup, $7.78 per inspection OB. $17.78 per change, $308.33 per setup, $700.00 per inspection OC. $26.67 per change, $7.78 per setup, $308.33 per inspection O D. $1,600.00 per change, $11.67 per setup, $205.56 per inspection

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter3: Process Cost Systems

Section: Chapter Questions

Problem 4E: The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the...

See similar textbooks

Similar questions

When setting its predetermined overhead application race, Tasty Box Meals estimated its overhead would be $100,000 and would require 25,000 machine hours in the next year. At the end of the year. It found that actual overhead was $102,000 and required 26,000 machine hours. Determine the predetermined overhead rate. What is the overhead applied during the year? Prepare the journal entry to eliminate the under applied or over applied overhead.
Rockford Company has four departmental accounts: Building Maintenance, General Factory Overhead, Machining, and Assembly. The direct labor hour method is used to apply factory overhead to the jobs being worked on in Machining and Assembly. The company expects each production department to use 30,000 direct labor hours during the year. The estimated overhead rates for the year include the following: During the year, both Machining and Assembly used 28,000 direct labor hours. Factory overhead costs incurred during the year follow: In determining application rates at the beginning of the year, cost allocations were made as follows, using the sequential distribution method: Building Maintenance to: General Factory Overhead, 10%; Machining, 50%; Assembly, 40%. General factory overhead was distributed according to direct labor hours. Required: Determine the under- or overapplied overhead for each production department. (Hint: First you must distribute the service department costs.)
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? Budgeted direct labor hours: 90,615 Budgeted direct labor expense: $750000 Estimated machine hours: 150,000
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the Blending Department for the coming fiscal year beginning February 1 would be 3,150,000, and total direct labor costs would be 1,800,000. During February, the actual direct labor cost totalled 160,000, and factory overhead cost incurred totaled 283,900. a. What is the predetermined factory overhead rate based on direct labor cost? b. Journalize the entry to apply factory overhead to production for February. c. What is the February 28 balance of the account Factory OverheadBlending Department? d. Does the balance in part (c) represent over- or underapplied factory overhead?
Pocono Cement Forms expects $900,000 in overhead during the next year. It does not know whether it should apply overhead on the basis of its anticipated direct labor hours of 60,000 or its expected machine hours of 30,000. Determine the product cost under each predetermined allocation rate if the last job incurred $1,550 in direct material cost, 90 direct labor hours, and 75 machine hours. Wages are paid at $16 per hour.
Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. At the zero-defect state, Nabors expects to spend 375,000 on quality engineering, 75,000 on vendor certification, and 50,000 on packaging inspection. Assume sales to be 25,000,000. Required: 1. Prepare a long-range performance report for 20x5. What does this report tell the management of Nabors? 2. Explain why quality costs still are present for the zero-defect state. 3. What if Nabors achieves the zero-defect state reflected in the report? What are some of the implications of this achievement?
If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of capacity the next month, will a different cost per unit be charged to the work-in-process account each month for factory overhead assuming that a predetermined annual overhead rate is used?
Colonels uses a traditional cost system and estimates next years overhead will be $480,000, with the estimated cost driver of 240,000 direct labor hours. It manufactures three products and estimates these costs: If the labor rate is $25 per hour, what is the per-unit cost of each product?
Zippy Inc. manufactures a fuel additive, Surge, which has a stable selling price of 44 per drum. The company has been producing and selling 80,000 drums per month. In connection with your examination of Zippys financial statements for the year ended September 30, management has asked you to review some computations made by Zippys cost accountant. Your working papers disclose the following about the companys operations: Standard costs per drum of product manufactured: Materials: Costs and expenses during September: Chemicals: 645,000 gallons purchased at a cost of 1,140,000; 600,000 gallons used. Empty drums: 94,000 purchased at a cost of 94,000; 80,000 drums used. Direct labor: 81,000 hours worked at a cost of 816,480. Factory overhead: 768,000. Required: Calculate the following for September, using the formulas on pages 421422 and 424 (Round unit costs to the nearest whole cent and compute the materials variances for both Surge and for the drums.): 1. Materials quantity variance. 2. Materials purchase price variance. 3. Labor efficiency variance. 4. Labor rate variance.
Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiners master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employers share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the companys union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 5,600 glare filters in inventory on December 31 of the current year, and has a policy of carrying 35 percent of the following month's projected sales in inventory. Information on the first four months of the coming year is as follows: Required: 1. Prepare the following monthly budgets for Greiner Company for the first quarter of the coming year. Be sure to show supporting calculations. a. Production budget in units b. Direct labor budget in hours c. Direct materials cost budget d. Sales budget 2. Calculate the total budgeted contribution margin for Greiner Company by month and in total for the first quarter of the coming year. Be sure to show supporting calculations. (CMA adapted)
Abbey Products Company is studying the results of applying factory overhead to production. The following data have been used: estimated factory overhead, 60,000; estimated materials costs, 50,000; estimated direct labor costs, 60,000; estimated direct labor hours, 10,000; estimated machine hours, 20,000; work in process at the beginning of the month, none. The actual factory overhead incurred for November was 80,000, and the production statistics on November 30 are as follows: Required: 1. Compute the predetermined rate, based on the following: a. Direct labor cost b. Direct labor hours c. Machine hours 2. Using each of the methods, compute the estimated total cost of each job at the end of the month. 3. Determine the under-or overapplied factory overhead, in total, at the end of the month under each of the methods. 4. Which method would you recommend? Why?
Patterson Corporation expects to incur 70,000 of factory overhead and 60,000 of general and administrative costs next year. Direct labor costs at 5 per hour are expected to total 50,000. If factory overhead is to be applied per direct labor hour, how much overhead will be applied to a job incurring 20 hours of direct labor? a. 120 b. 260 c. 28 d. 140