Question
In: Accounting
Gotham Inc. has a total of $50,000 in production overhead costs. The company’s products and related...
Gotham Inc. has a total of $50,000 in production overhead costs. The company’s products and related statistics follow.
|
Product X |
Product Y |
|
|
Direct Material in Pounds |
2,400 |
1,600 |
|
Direct labor hours |
320 |
480 |
|
Machine Hours |
720 |
280 |
|
Number of setups |
54 |
96 |
|
Number of Units Produced |
312 |
140 |
Additional data: The direct material was purchased for $8,000. One direct labor hour costs $20.
2A) Assume that Gotham uses direct labor hours to apply the overhead costs to the products. Determine the unit cost for product X?
2B) Assume that Gotham uses the following activity centers, cost drivers, and costs to apply overhead to products.
|
Cost Pool |
Cost Driver |
Overhead Cost |
|
Utilities |
# of machine hours |
$15,500 |
|
Setup |
# of setups |
$9,500 |
|
Material Handling |
# of pounds of material |
$25,000 |
Determine the unit cost for product Y?
please show all work and equations
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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Nova Company’s total overhead costs at various levels of
activity follow:
Month
Machine-Hours
Total Overhead Costs
April
78,000
$
214,000
May
115,500
286,000
June
96,000
238,000
July
106,000
246,640
Assume that the total overhead costs consist of utilities,
supervisory salaries, and maintenance. The breakdown of these costs
at the 78,000 machine-hour level of activity is as follows:
Utilities (V)
$
48,640
Supervisory salaries (F)
22,600
Maintenance (M)
142,760
Total overhead costs
$
214,000
V = variable; F = fixed; M...
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Crosshill Company’s total overhead costs at various levels of
activity are presented below:
Month
Machine-Hours
Total Overhead Cost
April
49,000
$209,260
May
39,000
$182,860
June
59,000
$235,660
July
69,000
$262,060
Assume that the overhead cost above consists of utilities,
supervisory salaries, and maintenance. The breakdown of these costs
at the 39,000-machine-hour level of activity in May is as
follows:
Utilities (variable)
$
58,500
Supervisory salaries (fixed)
65,000
Maintenance (mixed)
59,360
Total overhead cost
$
182,860
The...
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Crosshill Company’s total overhead costs at various levels of
activity are presented below:
Month
Machine-Hours
Total Overhead Cost
April
49,000
$191,570
May
39,000
$166,270
June
59,000
$216,870
July
69,000
$242,170
Assume that the overhead cost above consists of utilities,
supervisory salaries, and maintenance. The breakdown of these costs
at the 39,000-machine-hour level of activity in May is as
follows:
Utilities (variable)
$
54,600
Supervisory salaries (fixed)
53,000
Maintenance (mixed)
58,670
Total overhead cost
$
166,270
The...
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Ball Bearings, Inc., faces costs of production as follows:
QUANITY
TOTAL FIXED COSTS (DOLLARS)
TOTAL VARIABLE COSTS (DOLLARS)
0
180
0
1
180
80
2
180
140
3
180
180
4
180
240
5
180
320
6
180
450
Complete the following table by calculating the company’s
total cost, marginal cost, average fixed cost, average variable
cost, and average total cost at each level of production.
QUANITY
TOTAL COST (DOLLARS)
MARGINAL COST (DOLLARS)
AVERAGE FIXED COST (DOLLARS)
AVERAGE VARIABLE COST...
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Total overhead costs amount to $ 560,000. The company allocates
these costs to products based on a predetermined overhead rate,
calculated by dividing $ 560,000 by the total number of budgeted
direct labor hours. This number for the current year is 70,000
hours.
• Alfa used 12,000 hours and 16,000 units were produced
• Beta used 24,000 hours and 19,200 units were produced
• Gama used 34,000 hours and 20,000 units...
Mattawa Manufacturing Inc. has four categories of overhead. The expected overhead costs for each of the...
Mattawa Manufacturing Inc. has four categories of overhead. The
expected overhead costs for each of the categories for the next
year are as follows:
Expected Costs Cost Driver
Activity Maintenance $510,000
Machine hours 60,000
Material handling 250,000
Material moves 20,000
Setups 60,000
Setups 3,000
Inspection 21,000
Inspections 12,000
Currently, the company applies overhead using a predetermined
overhead rate based upon budgeted direct labour hours of 100,000.
The company has been asked to submit a bid on a proposed job.
Usually...
When preparing the manufacturing overhead budget, total overhead costs for the period does not equal total...
When preparing the manufacturing overhead budget, total overhead
costs for the period does not equal total overhead cash payments
for the period because:
a.overhead costs typically only require cash payments for
indirect materials.
b.overhead costs typically only require cash payments for
factory rent.
c.overhead costs typically do not require cash payments.
d.overhead costs typically include depreciation costs, which
does not require a cash payment.
High–Low Method; Predicting Cost Prince Company’s total overhead costs at various levels of activity are presented...
High–Low Method; Predicting Cost
Prince Company’s total overhead costs at various levels of activity
are presented below:
labour overhead
Month Hours Cost
September . . . . . . . . . . . . . . . . . . 100,000
$388,000
October . . . . . . . . . . . . . . . . . . . . . 80,000
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November . . . . . . ....
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Ripley, Inc., costs products using a normal costing system. The
following data are available for last year:
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Overhead
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Machine hours
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Direct labor hours
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Actual:
Overhead
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Machine hours
85,800
Direct labor hours
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Prime cost
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Number of units
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Overhead is applied on the basis of direct labor hours.
Required:
1. What was the predetermined overhead
rate?
$fill in the...
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