MANAGERIAL ACCOUNTING F/MGRS.
5th Edition
ISBN: 9781259969485
Author: Noreen
Publisher: RENT MCG
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Chapter 5A, Problem 5A.4P
1.
To determine
Introduction:
To compute: The cot per minutes of the resource supplied in shipping department, time driven activity rate for all three activities, and the total labor cost consumed by customer L, M and N.
2.
To determine
Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead.
To compute: The used capacity in minutes, unused capacity in minutes, unused capacity in number of employees, impact on expenses of matching capacity with demand.
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Last question 4)
The company uses normal costing with two direct-cost categories:
Direct materials
Direct manufacturing labor
Furthermore, the company uses two manufacturing overhead cost pools:
Machining department with machine- hours as the allocation base
Assembly department with direct manufacturing labor costs as the allocation base.
The budget for the plant in 2020 is as follows:
Production plant
Machine department
Assembly department
Manufacturing overhead costs
13 597 500
12 271 500
Direct manufacturing labor costs
1 455 000
6 075 000
Direct manufacturing labor-hours
54 000
22 500
Machine-hours
277 500
55 500
What is the budgeted manufacturing overhead rate in the machining and the assembly department?
Overhead is the direct cost involved in the production process of the business of the company
Calculation of budgeted manufacturing overhead rate in machine department:
Budgeted manufacturing…
Please Answer part 4.
Part 1-3 answers
Part 1
Computation of Cost Allocation Rate for each activity:
Activity
Costs
Base usage
Allocation rate
Material Handling
160,000
20,000
8
Packaging
390,000
2,000
195
Quality Assurance
112,000
1,600
70
Total
662,000
Part 2
Activity Usage of All Activities:
Activity
Commercial
Travel
Total
Material Handling
8700
4450
13,150
Packaging
900
300
1,200
Quality Assurance
270
370
640
Allocation of Cost basis Usage:
Activity
Commercial
Travel
Material Handling
69,600
35600
(Activity Usage * Cost Allocation Rate)
(8,700 * 8)
(4450 * 8)
Packaging
175,500
58500
Quality Assurance
18,900
25900
Total
264,000
120000
Units Produced
3,000
20000
Cost Per Unit
88
6
Part 3
Particulars
Commercial
Travel
Usage of…
Y2
Part 1
Clean−It−Up, Inc., is a manufacturer of vacuums and uses standard costing. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of budgeted machine-hours. In
2020, budgeted fixed manufacturing overhead cost was$18,000,000. Budgeted variable manufacturing overhead was $8 per machine-hour. The denominator level was 1,000,000 machine-hours.
Chapter 5A Solutions
MANAGERIAL ACCOUNTING F/MGRS.
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