Question 4.5Using activity based costing (ABC), calculate the overhead rate for the following activity:Design. That is, what is the overhead rate per hour of design? NOTE: Enter only the number ofdollars, do not enter the dollar, "$" , symbol. Therefore if your answer is "$10", enter only "10".Question 39Question 4.6Using activity based costing (ABC), calculate the overhead rate for the following activity:Installation. That is, what is the overhead rate per hour of installation to two decimal places?NOTE: Enter only the number of dollars, do not enter the dollar, "$" , symbol. Therefore if youranswer is "$10", enter only "10". Clear Solutions manufactures and installs standard and custom-designed shop windows. Last year,the company incurred $2,400,000 in overhead costs when a total of 30,000 direct labour hours wereincurred. After implementing activity-based costing (ABC), the company's accountant identified thefollowing related information:AllocationActivityProportion of overhead costBaseNumber ofPurchasing purchase 20%ordersMaterialdeliveryandNumber of10%deliverieshandlingHours ofDesigndesigntime20%Hours ofInstallation installation 50%timeThe number of activities for standard and custom-made windows is as follows:StandardCustomNumber of purchase orders1,0001,400Number of deliveries200400Hours of design time200800Hours of installation time700600During the past year, Clear Solutions accepted order no. 159 for one custom window installationthat would require the following:Direct labour hours20Number of purchase orders3Number of deliveries2Hours of design timeHours of installation time4

Solution 4.5: Budgeted overhead cost of design = $2,400,000*20% = $480,000 Budgeted hours of design…

Using activity based costing (ABC), calculate the overhead rate for the following activity: Design. That is, what is the overhead rate per hour of design? NOTE: Enter only the number of dollars, do not enter the dollar, "$", symbol. Therefore if your answer is "$10", enter only "10".

Using activity based costing (ABC), calculate the overhead rate for the following activity: Design. That is, what is the overhead rate per hour of design? NOTE: Enter only the number of dollars, do not enter the dollar, "$", symbol. Therefore if your answer is "$10", enter only "10".

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter2: Accounting For Materials

Section: Chapter Questions

Problem 17E: Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the...

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Kenkel, Ltd. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 80,000. b. Requisitioned raw materials to production, 80,000. c. Distributed direct labor costs, 10,000. d. Factory overhead costs incurred, 60,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 225,000, on account.
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Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 70,000. b. Requisitioned raw materials to production, 70,000. c. Distributed direct labor costs, 15,000. d. Factory overhead costs incurred, 45,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 195,000, on account. (Hint: Use a single account for raw materials and work in process.)
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Green Bay Cheese Company estimates its overhead to be $375,000. It expects to have 125,000 direct labor hours costing $1,500,000 in labor and utilizing 15,000 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
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