Preview

Management Accounting

Good Essays
Open Document
Open Document
466 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Management Accounting
Problem 1
A. Overhead: Department Rates
Production Departments
Assembly Packaging Total
Overhead $216000 $50400 $720000
Direct labor hours
Deluxe 10000 10000 20000
Regular 150000 10000 160000

Total DL 160000 20000 180000
Machine hours
Deluxe 2000 8000 10000
Regular 8000 72000 80000

Total machine hours 10000 80000 90000

Application rate 216000/160000=$1.35 504000/80000=$6.3 Per DL Per machine hour

Deluxe Regular
Assembly
10000×1.35 $13500
150000×1.35 $202500

Packaging
8000×6.3 50400
72000×6.3 453600 $63900 $656100
Units produced 20000 200000
Overhead per unit $3.195 $3.2805

Prime cost per unit Deluxe $160000/20000=$8 Regular $1500000/200000=$7.5
Per unit cost Deluxe $8+$3.195=$11.195 Regular $7.5+$3.2805=$10.7805
B. Plantwide Rate
Total overhead cost/Total direct labour hours= $720000/180000=$4 Overhead rate
Overhead cost
Deluxe $4×20000=$80000
Regular $4×160000=$640000

Overhead per unit Deluxe $80000/20000=$4 Regular $640000/200000=$3.2
Per unit cost Deluxe $8+$4=$12 Regular $7.5+$3.2=$10.7

C. Activity rate
Setups: $240,000/100 = $2,400
Moves: $120,000/300 = $4 00
Machine hours: $200,000/90,000 = $2.22
Inspection: $160,000/18,000 = $8.89

Overhead cost Deluxe Regular
Setups
2400×60 144000
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Acc 202 15-18
    • 322 Words
    • 2 Pages

    Acc 202 15-18

    Todhunter Publications established the following standard price and costs for a hardcover picture book that the company produces.…

    • 322 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    accounting week 4 answers
    • 469 Words
    • 5 Pages

    accounting week 4 answers

    1. Duggan Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $276,100 for the year, and machine usage is estimated at 125,500 hours.…

    • 469 Words
    • 5 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Managerial Accounting
    • 628 Words
    • 3 Pages

    Managerial Accounting

    Warren Company makes candy. During the most recent accounting period, Warren paid $3,000 for raw materials, $4,000 for labor, and $2,000 for overhead costs that were incurred to make candy. Warren started and completed 10,000 units of candy, of which 7,000 were sold. Based on this information, Warren would recognize which of the following amounts of expense on the income statement?…

    • 628 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Broadening Your Prospective
    • 389 Words
    • 2 Pages

    Broadening Your Prospective

    The total charged to an in-house manufacturing department would be $1,046,800. This dollar amount is determined by multiplying the overhead rates of each activity to the amount consumed for that activity and added together for a total. (1,800*70= 126,000), (280*940=263,200) (10*40,000=400,000), (2,800*92=257,600)…

    • 389 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Bridgeton Paper
    • 1658 Words
    • 7 Pages

    Bridgeton Paper

    1. The official overhead allocation rate used in the 1987 model year strategy study at the Automotive Component and Fabrication Plant (ACF) was 435% of direct labor cost. Calculate the overhead allocation rate using the 1987 model year budget. Why do you get different numbers?…

    • 1658 Words
    • 7 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Managerial Accounting
    • 779 Words
    • 3 Pages

    Managerial Accounting

    Activity-based costing involves two allocation stages and includes a multitude of cost drivers. The first stage known as ABC assigns costs to pools; which signify the activities of the costs to be incurred. During the second stage the cost pools are allocated to products or cost objects by utilizing cost drivers that measure the object’s use of that activity.…

    • 779 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Managerial Accounting
    • 448 Words
    • 2 Pages

    Managerial Accounting

    Chapter 3 Solutions, 3rd day Exercise 3-13 (15 minutes) 1. | Actual manufacturing overhead costs | | $ 48,000 | | Manufacturing overhead applied: 10,000 MH × $5 per MH | | 50,000 | | Overapplied overhead cost | | $ 2,000 | | | | | 2. | Direct materials: | | | | Raw materials inventory, beginning | $ 8,000 | | | Add: Purchases of raw materials | 32,000 | | | Raw materials available for use | 40,000 | | | Deduct: Raw materials inventory, ending | 7,000 | | | Raw materials used in production | | $ 33,000 | | Direct labor | | 40,000 | | Manufacturing overhead cost applied to work in process | | 50,000 | | Total manufacturing cost | | 123,000 | | Add: Work in process, beginning | | 6,000 | | | | 129,000 | | Deduct: Work in process, ending | | 7,500 | | Cost of goods manufactured | | $121,500 | | | | | Problem 3-24 (60 minutes) 1. a. b. | Actual manufacturing overhead costs: | | | Insurance, factory | $ 7,000 | | Depreciation of equipment | 18,000 | |…

    • 448 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Managerial Accounting
    • 2026 Words
    • 9 Pages

    Managerial Accounting

    Costs added by department 75,000 372,000 447,000 Total costs to account for $75,000 $372,000 $447,000 Cost per equivalent unit $ 1.00 $ 5.00 $ 6.00 Costs accounted for: Units completed (75,000 $6.00) $450,000 Ending work in process (12,000 $1.00) + (11,400 $5.00) 69,000 Total costs accounted for $519,000 5–6 Weighted Average Method, FIFO, Physical Flow, Equivalent Units 1. Physical flow schedule: Units, beginning work in process 12,000 Units started 20,000 Units to account for 22,000 Units completed and transferred out: Started and completed 1,200 From beginning work in process 12,000 Units, ending work in process 8,800 Total units accounted for 22,000 2. Equivalent units—Weighted average method: Direct Materials Conversion Costs Units completed 13,200 13,200 Units, ending work in process: 8,800 100% 8,800 8,800 25% 2,200 Equivalent units of output 22,000 15,400 3. Equivalent units—FIFO method: Direct Materials Conversion Costs Units started and completed…

    • 2026 Words
    • 9 Pages
    Good Essays
    Read More
  • Good Essays

    Managerial Accounting
    • 808 Words
    • 4 Pages

    Managerial Accounting

    1. The overhead allocation rate used in the 1987 model year strategy study at the Automotive Component & Fabrication Plant (ACF) was 435% of direct labor dollar cost. Calculated the overhead allocation rate using the 1987 model year budget. Calculate the overhead allocation rate for each of the model years 1988 through 1990. Are the changes since 1987 in overhead allocation rates significant? Why have these changes occurred?…

    • 808 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    Management Accounting
    • 660 Words
    • 3 Pages

    Management Accounting

    Marston Corporation manufactures disposable thermometers that are sold to hospitals through a network of independent sales agents located in the United States and Canada. The sales agents sell a variety of products to hospitals in addition to Marston’s disposable thermometer. The sales agents are currently paid an 18% commission on sales, and this commission rate was used when Marston’s management prepared the following budgeted income statement for the upcoming year. Marston Corporation Budgeted Income Statement Sales Cost of goods sold: Variable Fixed Gross margin Selling and administrative expenses: Commissions Fixed advertising expenses Fixed administrative expenses Net operating income $30,000,000 $17,400,000 2,800,000…

    • 660 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Managerial Accounting
    • 477 Words
    • 2 Pages

    Managerial Accounting

    for the year was $800,000 and estimated machine hours were 50,000 hours. Total machine hours…

    • 477 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Managerial Accounting
    • 366 Words
    • 2 Pages

    Managerial Accounting

    Reflect and describe which key concepts and topics in this course have made you a stronger candidate to enter the business world.…

    • 366 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Lambeth Custom Cabinets
    • 784 Words
    • 4 Pages

    Lambeth Custom Cabinets

    *Note: My balance sheet does not balance and I can’t seem to find where I went wrong.…

    • 784 Words
    • 4 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Purchase Orders
    • 558 Words
    • 3 Pages

    Purchase Orders

    | Calculate the overhead rates for each of the three activities.Number of purchase 62.5, Number of square feet 0.025, Number of sales orders 150…

    • 558 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    programming C
    • 709 Words
    • 3 Pages

    programming C

    Energetica Company’s predetermined overhead rate is based on direct labor hours. At the beginning of the current year, the company estimated that its manufacturing overhead would total $440,000 during the year. During the year, the company incurred $400,000 in actual manufacturing overhead costs. The Manufacturing Overhead account showed that overhead was underapplied by $16,000 during the year. If the predetermined overhead rate was $40.00 per direct labor hour, how many hours were worked during the year?…

    • 709 Words
    • 3 Pages
    Satisfactory Essays
    Read More

Related Topics