Steering Company estimated the following annual hours and costs: Expected annual direct labor hours 40,000 Expected...

Steering Company estimated the following annual hours and costs:

Expected annual direct labor hours		40,000
Expected annual direct labor cost		$1,400,000
Expected machine hours		40,000
Expected material cost for the year		$1,792,000
Expected manufacturing overhead		$2,240,000

(a)

Calculate predetermined overhead allocation rates using each of the four possible allocation bases provided. (Round direct labor cost and direct material cost answers to 2 decimal places, e.g. 15.25 and all other answers to 0 decimal places, e.g. 5,275.)

		Direct labor hours		Direct labor cost		Machine hours		Direct material cost
Predetermined overhead allocation		$enter a dollar amount rounded to 0 decimal places		$enter a dollar amount rounded to 2 decimal places		$enter a dollar amount rounded to 0 decimal places		$enter a dollar amount rounded to 2 decimal places

Solutions

Expert Solution

Direct labor hours:

Pedetermined overhead allocation rate = Estimated manufacturing overhead / Estimated direct labor hours

Pedetermined overhead allocation rate = $2,240,000 / 40,000 = $56 per DLH

Direct labor cost :

Pedetermined overhead allocation rate = Estimated manufacturing overhead / Estimated direct labor costs

Pedetermined overhead allocation rate = $2,240,000 / $1,400,000 = $1.6 per Direct labor cost

Machine hours:

Pedetermined overhead allocation rate = Estimated manufacturing overhead / Estimated machine hours

Pedetermined overhead allocation rate = $2,240,000 / 40,000 = $56 per MH

Material costs:

Pedetermined overhead allocation rate = Estimated manufacturing overhead / Estimated material costs

Pedetermined overhead allocation rate = $2,240,000 / $1,792,000 = $1.25 per Material costs

ekkarill92 answered 2 years ago

Next > < Previous

Related Solutions

III. Manufacturing Overhead Costs estimated $ 500,000 Direct Labor Hours estimated 50,000 Machine Hours estimated...

III. Manufacturing Overhead Costs estimated $ 500,000 Direct Labor Hours estimated 50,000 Machine Hours estimated 250,000 Direct Labor Costs estimated $ 1,000,000 Determine the Pre-determined Overhead rate based on the following: a Direct Labor Hours b Machine Hours c Direct Labor Cost

35. Aspen Technologies has the following budget data: Estimated direct labor hours Estimated direct labor dollars...

35. Aspen Technologies has the following budget data: Estimated direct labor hours Estimated direct labor dollars Estimated factory overhead costs 15.000 $90,000 $198,000 If factory overhead is to be applied based on direct labor hours, the predetermined overheadrateis If factory overhead is to be applied based on direct labour hours, the predetermined overhead rate is: a. $7.50 b. $13.20 c. $2.20 d. $16.50

Paulson Company had the following estimated costs for 2019: Direct materials .................... $28,000 Direct labor ...........................

Paulson Company had the following estimated costs for 2019: Direct materials .................... $28,000 Direct labor ........................ 22,000 Advertising expense ................. 15,000 Rent on factory building ............ 13,500 Depreciation on factory equipment ... 6,500 Indirect materials .................. 10,000 Sales commissions ................... 40,000 Production supervisor's salary ...... 28,000 Insurance on equipment .............. 15,000 It is known that 40% of the insurance relates to equipment in the factory while 60% of the insurance relates to the equipment in the administrative offices. Paulson Company...

Budgeted overhead cost $1,050,000 Estimated machine hours 50,000 Estimated direct labor hours 10,000 Estimated direct materials...

Budgeted overhead cost $1,050,000 Estimated machine hours 50,000 Estimated direct labor hours 10,000 Estimated direct materials cost $1,500,000 Maverick’s inventory count, completed on December 31, 2016, revealed the following ending inventory balances: Raw Materials Inventory $250,000 Work in Process Inventory $626,000 Finished Goods Inventory $340,000 The company’s 2017 payroll data revealed the following actual payroll costs for the year: Job Title Number Employed Wage Rate per Hour Annual Salary per Employee Total Hours Worked per Employee President and CEO 1...

ABC had an estimated factory overhead of $600,000 and an estimated direct labor hours of 100,000.

ABC had an estimated factory overhead of $600,000 and an estimated direct labor hours of 100,000. The company applies factory overhead, using direct labor hours as the cost driver.During the period, the company incurred $60,000 direct labor cost at a rate of $5 per hour.The actual factory overhead incurred is $80,000.Required:What is the predetermined overhead rate?What is the over- or under-applied factory overhead.Assuming that $50,000, $100,000, and $200,000 were balances found in Cost of Goods sold, Work-in-process, and finished goods,...

In November, Tim’s Toys, Inc., had direct materials costs of $60,000, direct labor costs of $40,000,...

In November, Tim’s Toys, Inc., had direct materials costs of $60,000, direct labor costs of $40,000, variable manufacturing overhead costs of $64,000, and fixed costs of $152,000. If Tim’s unit contribution margin is $200, what is the company’s break-even point? Select one: a. 820 units b. 760 units c. $152,000 d. $164,000 Equivalent units of production are a measure of: Select one: a. Units in ending work in process inventory. b. The work done during the period expressed in fully completed...

Estimated manufacturing overhead $ 500,000 Actual manufacturing overhead $ 550,000 Estimated direct labor hours 10,000 hours...

Estimated manufacturing overhead $ 500,000 Actual manufacturing overhead $ 550,000 Estimated direct labor hours 10,000 hours Actual direct labor hours 10,500 13. Calculate the predetermined overhead allocation rate using direct labor hours as the allocation base. 14. Determine the amount of overhead allocated during the year. Record the journal entry. 15. Determine the amount of underallocated or overallocated overhead. Record the journal entry to adjust Manufacturing Overhead.

The Jack and Sal Company uses direct labor hours for estimating factory overhead rate. An estimated...

The Jack and Sal Company uses direct labor hours for estimating factory overhead rate. An estimated factory overhead is $500,000 for the year. An estimated direct labor cost for the year is $100,000, and estimated direct labor hours for the year is 200,000 hours. The following additional information is provided: Beginning work in process is $300,000; Actual Direct Labor cost is $150,000; Actual Cost of Direct Materials used is $200,000; actual direct labor hours used 200,000 hours; and the tot...

The following data relate to direct labor costs for the current period: Standard costs 7,400 hours...

The following data relate to direct labor costs for the current period: Standard costs 7,400 hours at $11.60 Actual costs 6,300 hours at $10.50 What is the direct labor rate variance? a.$19,690 unfavorable b.$6,930 favorable c.$19,690 favorable d.$12,760 favorable

The following data relate to direct labor costs for the current period: Standard costs 7,500 hours...

The following data relate to direct labor costs for the current period: Standard costs 7,500 hours at $11.40 Actual costs 6,400 hours at $10.40 What is the direct labor time variance? a.$12,540 unfavorable b.$11,440 favorable c.$11,440 unfavorable d.$12,540 favorable

Subjects