MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 4, Problem 4E
To determine
Concept introduction:
Predetermined overhead allocation:
Manufacturing overhead cost is the pool of all indirect costs incurred for the production. These are the costs which are not directly traceable to the product.
Requirement 1:
To calculate:
Plant wide overhead allocation rate.
To determine
Concept introduction:
Predetermined overhead allocation:
Manufacturing overhead cost is the pool of all indirect costs incurred for the production. These are the costs which are not directly traceable to the product. Manufacturing costs include indirect material indirect labor and overheads. These costs are allocated to the products using the predetermined overhead allocation rate. The formula of predetermined overhead allocation rate is as follows:
Requirement 2:
To calculate:
Overhead cost assigned to each product.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Angler Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next year's expected costs and activities are shown below.
Assembly
248,888 DLH
Finishing
154,000 DLH
68,000 MH
448,800 MH
$440,000
Direct labor hours
Machine hours
Overhead costs
Assume that Angler Industries allocates overhead using a plantvide overhead rate based on machine hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and
3.90 machine hours in the Assembly Department, and 4.00 direct labor hours and 0.6 machine hours in the Finishing Department?
Multiple Chaises
O
O
O
$21.50
$17.60
$2.00.
$18.10
$ 677,680
$13.20.
Angler Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next year's expected
costs and activities are shown below.
Direct labor hours
Machine hours
Overhead costs
Multiple Choice
O $15.60.
O
Assume that the Assembly Department allocates overhead based on machine hours, and the Finishing Department allocates overhead based on direct
labor hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 3.4 machine hours in the Assembly Department,
and 4.0 direct labor hours and 0.6 machine hours in the Finishing Department?
$3.40
Assembly
190,000 DLH
390,000 MH
$16.10.
$ 390,000
Finishing)
149,000 DLH:
95,550 MH
$ 581,100
Angle Max Industries produces a product which goes through two operations, Assembly and Finishing,
before it is ready to be shipped. Next year's expected costs and activities are shown below.
Direct labor hours
Machine hours
Overhead costs
Multiple Choice
Assume that the Assembly Department allocates overhead using a plantwide overhead rate based on machine hours.
How much total overhead will be assigned to a product that requires 2 direct labor hour and 3.30 machine hours in the
Assembly Department, and 4.50 direct labor hours and 0.4 machine hours in the Finishing Department?
O$17.60.
Assembly
180,000 DLH
380,000 MH
$380,000
$20.40.
Finishing
148,000 DLH
91, 200 MH
$562, 400
Chapter 4 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
Ch. 4 - Prob. 1MCQCh. 4 - Prob. 2MCQCh. 4 - All of the following are examples of batch-level...Ch. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Why are overhead costs allocated to products and...Ch. 4 - What are three common methods of assigning...Ch. 4 - Why are direct labor hours and machine hours...Ch. 4 - What are the advantages of using a single plant...Ch. 4 - The usefulness of a single plant wide overhead...
Ch. 4 - What is a cost object?Ch. 4 - Explain why a single plantwide overhead rate can...Ch. 4 - Why are multiple departmental overhead rates more...Ch. 4 - Prob. 9DQCh. 4 - Prob. 10DQCh. 4 - Prob. 11DQCh. 4 - Prob. 12DQCh. 4 - Prob. 13DQCh. 4 - Prob. 14DQCh. 4 - 15. What are the four activity levels associated...Ch. 4 - Prob. 16DQCh. 4 - Prob. 17DQCh. 4 - Prob. 1QSCh. 4 - Prob. 2QSCh. 4 - Plant wide rate method P1 A manufacturer uses...Ch. 4 - Prob. 4QSCh. 4 - Prob. 5QSCh. 4 - Prob. 6QSCh. 4 - Prob. 7QSCh. 4 - Prob. 8QSCh. 4 - Prob. 9QSCh. 4 - Prob. 10QSCh. 4 - Prob. 11QSCh. 4 - Prob. 12QSCh. 4 - Prob. 13QSCh. 4 - Prob. 14QSCh. 4 - Prob. 15QSCh. 4 - Prob. 1ECh. 4 - Prob. 2ECh. 4 - Prob. 3ECh. 4 - Prob. 4ECh. 4 - Prob. 5ECh. 4 - Prob. 6ECh. 4 - Prob. 7ECh. 4 - Prob. 8ECh. 4 - Refer to the information in Exercise 4-7 to answer...Ch. 4 - Consider the following date for two products of...Ch. 4 - Prob. 11ECh. 4 - Prob. 12ECh. 4 - Prob. 13ECh. 4 - Exerciser 17-14 Activity-based costing P3 A2...Ch. 4 - Prob. 15ECh. 4 - Prob. 16ECh. 4 - Prob. 17ECh. 4 - Prob. 18ECh. 4 - Prob. 1PSACh. 4 - Prob. 2PSACh. 4 - Prob. 3PSACh. 4 - Prob. 4PSACh. 4 - Prob. 5PSACh. 4 - Prob. 1PSBCh. 4 - Prob. 2PSBCh. 4 - Ryan Foods produces gourmet gift baskets that it...Ch. 4 - Prob. 4PSBCh. 4 - Prob. 5PSBCh. 4 - Prob. 4SPCh. 4 - Prob. 1BTNCh. 4 - Prob. 2BTNCh. 4 - Prob. 3BTNCh. 4 - Prob. 4BTNCh. 4 - Accounting professionals who for private companies...Ch. 4 - Prob. 6BTNCh. 4 - Prob. 7BTNCh. 4 - Prob. 8BTNCh. 4 - Prob. 9BTN
Knowledge Booster
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
- The following table presents the activities and activity drivers that LampPlus uses in manufacturing Product 1 and Product 2. Complete the table: Activity Design Preparation Machining Finishing Inspection Packaging Shipping Cost Activity Driver $ 39,060 Design time $ 67,650 Labor hours 105,200 Machine hours $ Batches Units Orders $ 12,720 Packages Driver Usage Prod. 1 840 3,130 209 76 Prod. 2 1,330 hours hours 300 56 Activity Rate $ $ $ $ /hour /hour 20 /hour 50 /batch 17 /unit 302 /order /package Activity Cost:Prod. 1 $ $ $ $ 34,430 31,200 Activity Cost:Prod. 2 9,690 $ 12,986 $ 19,720 3,600arrow_forwardRequired information [The following information applies to the questions displayed below.] Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $243,750 in the Molding department and $203,750 in the Trimming department. The company budgets 16,000 machine hours (MH) in Molding and 25,000 direct labor hours (DLH) in Trimming. Actual production information follows. Molding Department Trimming Department Hours per Unit Part Z Part X Totals Number of Units 3,000 4,000 Hours per Unit 2.0 MH per unit Total Hours Total Hours 2.5 MH per unit 6,000 MH 10,000 MH 16,000 MH 3 DLH per unit 4 DLH per unit 9,000 DLH 16,000 DLH 25,000 DLH Required: 1. Compute the plantwide overhead rate using direct labor hours as the allocation base. 2. Determine the overhead cost per unit for each part using the plantwide rate.arrow_forwardSilven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Expected Cost Activity Driver Activity Activity Capacity Setting up equipment $147,000 Number of setups 120 Ordering materials Number of orders 26,400 1,200 Machining Machine hours 101,500 10,150 Receiving 23,100 Receiving hours 1,155 Silven produces two models of cell phones with the following expected activity demands: Model Model Y Units completed 5,400 10,800 Number 80 40 of setups Number of orders 400 800 Machine hours 5,800 4,350 770 Receiving hours 385 Required: 1. Determine the total overhead assigned to each product using the four activity drivers. 2. Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatively inexpensive activities are allocated to the two expensive activities in proportion to their costs. Round interim calculations to two decimal places and round your final answers to the nearest…arrow_forward
- Pant Risers manufactures bands for self-dressing assistive devices for mobility-impaired individuals. Manufacturing is a one-step process where the bands are cut and sewn. This is the information related to this year’s production: Units to Account For Units Materials Conversion Beginning work in process inventory 500 500 250 Started 19,500 Total units to accounted for 20,000 Ending inventory was 100% complete as to materials and 80% complete as to conversion, and the total materials cost is $54,000 and the total conversion cost is $34,010. Using the weighted-average method, what are the unit costs if the company transferred out 15,000 units? If required, round final answers to two decimal places. Costper unit Materials $fill in the blank 1 Conversion $fill in the blank 2 Using the weighted-average method, what is the value of the inventory transferred out and the value of the ending WIP inventory? Inventory transferred out $fill in the blank 3…arrow_forwardPant Risers manufactures bands for self-dressing assistive devices for mobility-impaired individuals. Manufacturing is a one-step process where the bands are cut and sewn. This is the information related to this year's production: Units to Account For Units Materials Conversion Beginning work in process inventory 500 500 250 Started 21,500 Total units to accounted for 22,000 Ending inventory was 100% complete as to materials and 60% complete as to conversion, and the total materials cost is $60,720 and the total conversion cost is $37,944. Using the weighted-average method, what are the unit costs if the company transferred out 18,000 units? If required, round final answers to two decimal places. Cost per unit Materials Conversion Using the weighted-average method, what is the value of the inventory transferred out and the value of the ending WIP inventory? Inventory transferred out $ Ending WIP inventoryarrow_forwardRequired information [The following information applies to the questions displayed below.] Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $248,750 in the Molding department and $208,750 in the Trimming department. The company budgets 16,000 machine hours (MH) in Molding and 25,000 direct labor hours (DLH) in Trimming. Actual production information follows. Required: Compute the plantwide overhead rate using direct labor hours as the allocation base. Determine the overhead cost per unit for each part using the plantwide rate. Complete this question by entering your answers in the tabs below. Compute the plantwide overhead rate using direct labor hours as the allocation base.arrow_forward
- Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity $138,000 Number of setups 10,200 Number of orders 92,400 Machine hours 18,480 Receiving hours phones with the following expected activity demands: Setting up equipment Ordering materials Machining Receiving Silven produces two models of cell Model X 5,000 80 200 6,600 385 Units completed Number of setups Number of orders Machine hours Receiving hours Required: Model Y 10,000 40 400 4,950 770 120 600 11,550 1,155arrow_forwardRequired information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $246,250 in the Molding department and $206,250 in the Trimming department. The company budgets 16,000 machine hours (MH) in Molding and 25,000 direct labor hours (DLH) in Trimming. Actual production information follows. Number of Molding Department Units Hours per Unit Total Hours Trimming Department Hours per Unit Total Hours Part Z Part X Totals 3,000 2.0 MH per unit 4,000 2.5 MH per unit 6,000 MH 10,000 MH 16,000 MH 3 DLH per unit 9,000 DLH 4 DLH per unit 16,000 DLH 25,000 DLH Exercise 17-7 (Algo) Plantwide overhead rate LO P1 Required: 1. Compute the plantwide overhead rate using direct labor hours as the allocation base. 2. Determine the overhead cost per unit for each part using the…arrow_forwardX Company manufactures cakes in two departments: Mixing and Packaging. The company uses a process cost accounting system. All materials are entered the beginning of each process. During April 2020, the following transactions were completed: Assigned raw materials of $60,000 and $50,000 to Work in Process Mixing and Packaging respectively. Factory labor costs of $20,000 and $40,000 were assigned to Work in Process Mixing and Packaging respectively. The company applied manufacturing overhead on the basis of $15 per machine hour. Machine hours used were 1,000 in Mixing and 2,000 in Packaging. During April, the company transferred units costing S80,000 from Mixing to Packaging. In addition, it trans ferred units costing $160,000 from Packaging to Finished Goods. Based on the above, the entry prepared to assign factory labor to work in processes consisted of: A Debit to WIP Mixing $20,000, a Debit to WIP Packaging $40,000, and a Credit to Factory Labor Inventory $60,000 A Debit to WIP…arrow_forward
- Gee Manufacturing produces two models of camshafts used in the production of automobile engines: Regular and High Performance. Gee currently uses an ABC system to assign costs to the two products. For the coming year, the company has the following overhead activities, costs, and activity drivers: activity expected cost activity driver activity capacity setups $214,612 set up hours 10,000 machining $420,000 machine hours 20,000 moving $112,500 move hours 5,000 total overhead $747,112 At practical capacity, the expected activity demands for each product are as follows: regular performance model high performance model units completed 30,000 8,000 set up hours 8,000 2,000 machine hours 6,000 14,000 moving hours 1,000 4,000 The production cycle time for the regular performance camshaft is 0.50 (hours per unit) and that of the high performance camshaft is 2.5 (hours per unit). Required: Calculate the consumption ratios for each activity. Use these…arrow_forwardGee Manufacturing produces two models of camshafts used in the production of automobile engines: Regular and High Performance. Gee currently uses an ABC system to assign costs to the two products. For the coming year, the company has the following overhead activities, costs, and activity drivers: activity expected cost activity driver activity capacity setups $214,612 set up hours 10,000 machining $420,000 machine hours 20,000 moving $112,500 move hours 5,000 total overhead $747,112 At practical capacity, the expected activity demands for each product are as follows: regular performance model high performance model units completed 30,000 8,000 set up hours 8,000 2,000 machine hours 6,000 14,000 moving hours 1,000 4,000 The production cycle time for the regular performance camshaft is 0.50 (hours per unit) and that of the high performance camshaft is 2.5 (hours per unit). Required: 1. Calculate the total and per unit overhead assigned to each model…arrow_forwardSaved Lynwood, Inc. produces two different products (Product A and Product X) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $180 per machine hour, and the activity rate for Inspection is $540 per batch. The activity drivers are used as follows: Product A Product X Total Machine hours 1,400 3,100 4,500 Number of batches 47 18 65 15 What is the amount of Inspection cost assigned to Product A? Multiple Cholce $9.720 $25,380 $252,000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY