The cost accountant for M. Company wants to determine the cost of factory overhead. Based on observation and discussions with plant workers, you feel that five accounts are most relevant. Two are fixed- supervisory salaries and depreciation- and the remaining three are variable. Indirect labor is primarily used to move materials and varies with a number of moves. The largest component of utilities is electricity to run production machinery; which is driven by machine hours. Purchasing seems to be driven by the number of purchase orders. The accounts and their balances for the past six months are shown below: Indirect Plant and Labor Supervisory Equipment Cost Utilities Purchasing Salaries Depreciation July $14,250 $12,000 $38,200 $20,000 $6,500 Aug 15,800 10,600 35,400 23,000 6,500 Sep 16,800 12,500 37,600 32,000 6,500 Oct 20,700 12,500 40,200 27,800 6,500 Nov 20,000 12,500 39,900 25,400 6,500 Dec 17,000 12,500 39,700 17,000 6,500 Total 104,550 72,600 231,000 145,200 39,000 What are the average account balances for each of the five accounts, and the average monthly amount of each of the three drivers?
The cost accountant for M. Company wants to determine the cost of factory overhead. Based on observation and discussions with plant workers, you feel that five accounts are most relevant. Two are fixed- supervisory salaries and
|
|
Indirect
|
|
|
|
Plant and |
|
|
Labor
|
|
|
Supervisory |
Equipment |
|
|
Cost |
Utilities |
Purchasing |
Salaries |
Depreciation |
|
July |
$14,250 |
$12,000 |
$38,200 |
$20,000 |
$6,500 |
|
Aug |
15,800 |
10,600 |
35,400 |
23,000 |
6,500 |
|
Sep |
16,800 |
12,500 |
37,600 |
32,000 |
6,500 |
|
Oct |
20,700 |
12,500 |
40,200 |
27,800 |
6,500 |
|
Nov |
20,000 |
12,500 |
39,900 |
25,400 |
6,500 |
|
Dec |
17,000 |
12,500 |
39,700 |
17,000 |
6,500 |
|
Total |
104,550 |
72,600 |
231,000 |
145,200 |
39,000 |
What are the average account balances for each of the five accounts, and the average monthly amount of each of the three drivers?
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