Lonoca Engineering manufactures products for high precision engineering industry. It has two production departments (Assembly and Finishing) and two support departments (Maintenance and Human Resource). The usage of the two support departments in 2020 is as follows: User of Support Department Human Resource Maintenance Human Resource - 5% Maintenance 5% - Assembly 55% 40% Finishing 40% 55% The budgeted costs in the support departments for 2020 were as follows: Human Resource $200,000 Maintenance $50,000

Lonoca Engineering manufactures products for high precision engineering industry. It has two production departments (Assembly and Finishing) and two support departments (Maintenance and Human Resource). The usage of the two support departments in 2020 is as follows: User of Support Department Human Resource Maintenance Human Resource - 5% Maintenance 5% - Assembly 55% 40% Finishing 40% 55% The budgeted costs in the support departments for 2020 were as follows: Human Resource $200,000 Maintenance $50,000

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter19: Support Department And Joint Cost Allocation

Section: Chapter Questions

Problem 2CMA: Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing...

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Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows: At the beginning of March, Salisburys management planned to produce 500,000 bottles. The actual number of bottles produced for March was 525,000 bottles. The actual costs for March of the current year were as follows: a. Prepare the March manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for Salisbury, assuming planned production. b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for March. c. Interpret the budget performance report.
Nozama.com Inc. sells consumer electronics over the Internet. For the next period, the budgeted cost of the sales order processing activity is 250,000 and 50,000 sales orders are estimated to be processed. a. Determine the activity rate of the sales order processing activity. b. Determine the amount of sales order processing cost associated with 30,000 sales orders.
Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming year is: Previously, Sanjay Bhatt, Firenza Companys controller, had applied overhead on the basis of machine hours. Expected machine hours for the coming year are 50,000. Sanjay has been reading about activity-based costing, and he wonders whether or not it might offer some advantages to his company. He decided that appropriate drivers for overhead activities are purchase orders for purchasing, number of setups for setup cost, engineering hours for engineering cost, and machine hours for other. Budgeted amounts for these drivers are 5,000 purchase orders, 500 setups, and 2,500 engineering hours. Sanjay has been asked to prepare bids for two jobs with the following information: The typical bid price includes a 40 percent markup over full manufacturing cost. Required: 1. Calculate a plantwide rate for Firenza Company based on machine hours. What is the bid price of each job using this rate? 2. Calculate activity rates for the four overhead activities. What is the bid price of each job using these rates? 3. Which bids are more accurate? Why?
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