Question

Munoz Sporting Equipment manufactures baseball bats and tennis rackets. Department B produces the baseball bats, and Department T produces the tennis rackets. Munoz currently uses plantwide allocation to allocate its overhead to all products. Direct labor cost is the allocation base. The rate used is 200 percent of direct labor cost. Last year, revenue, materials, and direct labor were as follows.

 

  Baseball Bats Tennis Rackets
Sales revenue $1,610,000 $1,150,000
Direct labor 340,000 170,000
Direct materials 566,000 294,000

 

Required:

a. Compute the profit for each product using plantwide allocation.
b. Maria, the manager of Department T, was convinced that tennis rackets were really more profitable than baseball bats. She asked her colleague in accounting to break down the overhead costs for the two departments. She discovered that had department rates been used, Department B would have had a rate of 150 percent of direct labor cost and Department T would have had a rate of 300 percent of direct labor cost. Recompute the profits for each product using each department’s allocation rate (based on direct labor cost).
 

  Profit
   Baseball          Bats       Tennis             Rackets
a. Using plantwide allocation          ?           ?
b. Using departments allocation rate          ?           ?

 

 
 
Expert Solution

Want to see the full answer?

Check out a sample Q&A here
Blurred answer
Students who’ve seen this question also like:
Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
Not helpful? See similar books
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Activity-based, Variable, And Absorption Costing. 2PB
marketing sidebar icon
Want to see this answer and more?
Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*
*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Munoz Sporting Equipment manufactures baseball bats and tennis rackets. Department B produces the…

A: Overhead allocation rate is the rate on which total overhead is allocated to different production…

Q: Munoz Sporting Equipment manufactures baseball bats and tennis rackets. Department B produces the…

A: Cost Sheet:   A report which accumulate all the cost that are realized with a product. The cost…

Q: Munoz Sporting Equipment manufactures baseball bats and tennis rackets. Department B produces the…

A: Plant wide overhead rate is defined as the single rate which is used for assigning or allocating all…

Q: Ryan Corporation manufactures auto steering systems. Prime cost and machine time estimates for one…

A: Requirement 1 .                             A                  B…

Q: Ryan Corporation manufactures auto steering systems. Prime cost and machine time estimates for one…

A: Answer to question 5 is calculated below.

Q: Dawson Company manufactures small table lamps and desk lamps. The following shows the activities per…

A: Overheads are considered as fixed and common expenses that should be allocated to the products on…

Q: XYZ Co. manufactures baseball bats and wooden tops. Currently, the company makes 5,000 baseball bats…

A: Under activity based costing, all overhead and indirect costs are allocated on the basis of…

Q: XYZ Co. manufactures baseball bats and wooden tops. Currently, the company makes 5,000 baseball bats…

A: Units = 5,000 Direct material = 1 Direct labor = 0.50 Cutting = 7,500 Finishing = 12,000

Q: XYZ Co. manufactures baseball bats and wooden tops. Currently, the company makes 5,000 baseball bats…

A: Under activity based costing, all indirect costs or overheads are allocated to products or jobs, on…

Q: XYZ Co. manufactures baseball bats and wooden tops. Currently, the company makes 5,000 baseball bats…

A: The manufacturing cost is the cost incurred to manufacture the products during the period.

Q: XYZ Co. manufactures baseball bats and wooden tops. Currently, the company makes 5,000 baseball bats…

A: Activity based costing system is a costing system in which all indirect costs are allocated to…

Q: XYZ Co. manufactures baseball bats and wooden tops. Currently, the company makes 5,000 baseball bats…

A: Product cost are costs incurred to make a product i.e directly related to the production process.

Q: JYD Corporation has two departments, Assembly and Finishing. The following are data available for…

A: Overhead means the cost incurred indirect in factory for the production of goods. Manufacturing…

Q: XYZ Co. manufactures baseball bats and wooden tops. Currently, the company makes 5,000 baseball bats…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: XYZ Co. manufactures baseball bats and wooden tops . Currently , the company makes 5,000 baseball…

A: The question is multiple choice question. Required  Choose the Correct Option.

Q: National Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital…

A: Direct labour    High F  12000 units x 19.60 = $235200 Great P 17000 units  x 15.20 = $258400 Total…

Q: XYZ Co. manufactures baseball bats and wooden tops. Currently, the company makes 5,000 baseball bats…

A: Manufacturing cost is the total expense occur on manufacturing of goods or services rendered. It…

Q: XYZ Co. manufactures baseball bats and wooden tops. Currently, the company makes 5,000 baseball bats…

A: The total manufacturing cost would seem to be the total cost spent by a company to create items…

Q: XYZ Co. manufactures baseball bats and wooden tops. Currently, the company makes 5,000 baseball bats…

A: Units = 5000 Direct material = 1 Direct labor = 0.50 Cutting = 7,500 Finishing = 12,500

Q: Sheffield Music Company makes custom marimbas and xylophones. Since much of the work on these…

A: Predetermined overhead rate = Estimated manufacturing overhead / Estimated direct labor hours  =…

Q: Bergeron Co. manufactures two printers, Pronto and Speedy. Total overhead of $1,260,000 is incurred…

A: Setups = 25 + 25 = 50 Machine hours = 6500 + 3500 = 10000 Orders shipped = 225 + 375 = 600

Q: Bergeron Co. manufactures two printers, Pronto and Speedy. Total overhead of $1,260,000 is incurred…

A: Financial statements are statements which states the business activities performed by the company .…

Q: University Printers has two service departments (Maintenance and Personnel) and two operating…

A: Under step method, cost of one service department is allocated to other departments and then other…

Q: Vandalay Industries manufactures two products: toasters and blenders. The annual production and…

A: Predetermined Overhead Rate: Predetermined overhead rate is a measure used to allocate the estimated…

Q: Vandalay Industries manufactures two products: toasters and blenders. The annual production and…

A: Predetermined overhead allocation rate using the traditional costing system = Total estimated…

Q: Vernon Company makes three products in its factory: plastic cups, plastic tablecloths, and plastic…

A: Overhead means the cost incurred indirect in factory for the production of goods. Manufacturing…

Q: 0. XYZ Co. manufactures baseball bats and wooden tops. Currently, the company makes 5,000 baseball…

A: The total manufacturing cost includes all costs associated with all resources employed in the…

Q: Bergeron Co. manufactures two printers, Pronto and Speedy. Total overhead of $1,260,000 is incurred…

A: The Overhead cost is applied on the basis of the pre determined overhead rate according to different…

Q: Bergeron Co. manufactures two printers, Pronto and Speedy. Total overhead of $1,260,000 is incurred…

A: Overhead means the cost incurred indirect in factory for the production of goods. Manufacturing…

Q: Pineapple Motor Company manufactures two types of specialty electric motors, a commercial motor and…

A: Click to see the answer

Q: Windsor Co. incurs $ 980000 of overhead costs each year in its three main departments, machining ($…

A: Under activity-based costing overhead costs are assigned to each product or service based on cost…

Q: Deoro Company has identified the following overhead activities, costs, and activity drivers for the…

A: 1. Determine the unit cost for each model using direct labor hours to apply overhead.

Q: Sabina Company has two support departments, Human Resources and General Factory, and two producing…

A: The manufacturing of a product may take services from different departments such as producing…

Q: Sander company produces Wall Clocks and Alarm Clocks. The company operates at capacity. Data related…

A: Overheads                                       Cost driver                             Cost per…

Q: Bergeron Co. manufactures two printers, Pronto and Speedy. Total overhead of S1,260,000 is incurred…

A: Financial statements are statements which states the business activities performed by the company .…

Q: Bergeron Co. manufactures two printers, Pronto and Speedy. Total overhead of S1,260,000 is incurred…

A: Activity rate=Cost of activityActivity base

Q: Eclipse Motor Company manufactures two types of specialty electric motors, a commercial motor and a…

A: NOTE : As per BARTLEBY guidelines, when multiple questions are given, then first question is to be…

Q: Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead…

A: Since you have specifically asked for part 3 and 4 so we have solved the same for you.

Q: Green Co. uses 6 machine hours and 2 direct labor hours to produce Product A. It uses 8 machine…

A: Solution:- Computation of total factory overhead cost for two products are as follows under:-…

Q: Windsor Co. incur $1067500 of overhead costs each year in its three main departments, machining…

A: Calculate activity rate for each department.

Q: Windsor Co.incurs $987000 of overhead costs each year in its three main departments, machining…

A: Calculate overhead allocation rate:Overhead allocation rate = Estimated overhead cost / Direct labor…

Q: Main Street Ice Cream Company uses a plantwide allocation method to allocate overhead based on…

A: The question is based on the concept of Cost Accounting.

Q: A company incurs $4,050,000 of overhead each year in three departments: Ordering and Receivin…

A: As per activity-based costing the cost is allocated based on the expected uses of the driver. The…

Q: Mozart Music Inc. makes three musical instruments: trumpets, tubas, and trombones. The budgeted…

A: Plantwide overhead rate refers to single overhead rate at which company use to assign all its…

Q: Mozart Music Inc. makes three musical instruments: trumpets, tubas, and trombones. The budgeted…

A: Overhead means an expenses which is not direclty linked with production or sale but indirectly…

Q: Pineapple Corporation manufactures custom-made bags. The following data pertains to Job PA8: Direct…

A: Solution Predetermined overhead rate = Estimated overhead / Estimated direct labor hours = $125,000…

Q: Main Street Ice Cream Company uses a plantwide allocation method to allocate overhead based on…

A: Part a:

Q: Isaacson's Fine Furnishings manufactures upscale custom furniture. Isaacson's currently uses a…

A: Part 2:

Q: Isaacson's Fine Furnishings manufactures upscale custom furniture. Isaacson's currently uses a…

A: Overhead rate is the rate determined by dividing the total overheads by the total units of…

Q: Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments:…

A: Overhead Allocation Rate = Estimated factory Overhead Cost / Estimated Direct Labor hours Overhead…

Knowledge Booster
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • Stacks manufactures two different levels of hockey sticks: the Standard and the Slap Shot. The total overhead of $600,000 has traditionally been allocated by direct labor hours, with 400,000 hours for the Standard and 200.000 hours for the Slap Shot. After analyzing and assigning costs to two cost pools, it was determined that machine hours is estimated to have $450.000 of overhead, with 30,000 hours used on the Standard product and 15,000 hours used on the Slap Shot product. It was also estimated that the inspection cost pool would have $150,000 of overhead, with 25,000 hours for the Standard and 5,000 hours for the Slap Shot. What is the overhead rate per product, under traditional and under ABC costing?
    Active Frame, Inc., manufactures clear and tinted sport glasses. The manufacturing of clear glasses takes 45,000 direct labor hours and involves 1,700 parts and 115 inspections. The manufacturing of tinted glasses takes 115,000 direct labor hours and involves 1,400 parts and 450 inspections. The traditional method applies $560,000 of overhead on the basis of direct labor hours. What is the amount of overhead per direct labor hour applied to the clear glass products? A. $933.33 B. $157,500 C. $322.500 D. $402,500
    Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. Wood used to produce desks ($125,00 per desk) Production labor used to produce desks ($15 per hour) Production supervisor salary ($45,000 per year) Depreciation on factory equipment ($60,000 per year) Selling and administrative expenses ($45,000 per year) Rent on corporate office ($44,000 per year) Nails, glue, and other materials required to produce desks (varies per desk) Utilities expenses for production facility Sales staff commission (5% of gross sales)
    Recommended textbooks for you
  • Principles of Accounting Volume 2
    Accounting
    ISBN:9781947172609
    Author:OpenStax
    Publisher:OpenStax College
    Cornerstones of Cost Management (Cornerstones Ser...
    Accounting
    ISBN:9781305970663
    Author:Don R. Hansen, Maryanne M. Mowen
    Publisher:Cengage Learning
    Managerial Accounting
    Accounting
    ISBN:9781337912020
    Author:Carl Warren, Ph.d. Cma William B. Tayler
    Publisher:South-Western College Pub
  • Financial And Managerial Accounting
    Accounting
    ISBN:9781337902663
    Author:WARREN, Carl S.
    Publisher:Cengage Learning,
    Managerial Accounting: The Cornerstone of Busines...
    Accounting
    ISBN:9781337115773
    Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
    Publisher:Cengage Learning
  • Principles of Accounting Volume 2
    Accounting
    ISBN:9781947172609
    Author:OpenStax
    Publisher:OpenStax College
    Cornerstones of Cost Management (Cornerstones Ser...
    Accounting
    ISBN:9781305970663
    Author:Don R. Hansen, Maryanne M. Mowen
    Publisher:Cengage Learning
    Managerial Accounting
    Accounting
    ISBN:9781337912020
    Author:Carl Warren, Ph.d. Cma William B. Tayler
    Publisher:South-Western College Pub
    Financial And Managerial Accounting
    Accounting
    ISBN:9781337902663
    Author:WARREN, Carl S.
    Publisher:Cengage Learning,
    Managerial Accounting: The Cornerstone of Busines...
    Accounting
    ISBN:9781337115773
    Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
    Publisher:Cengage Learning