Question

In: Accounting

Tidwell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at...

Tidwell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100,000 for the year.

Activity Cost Pool Cost Driver Est. Overhead Cost Driver Activity

Ordering and Receiving Orders $ 120,000 500 orders

Machine Setup Setups 297,000 450 setups

Machining Machine hours 1,500,000 125,000 MH

Assembly Parts 1,200,000 1,000,000 parts

Inspection Inspections 300,000 500 inspections

If overhead is applied using traditional costing based on direct labor hours, the overhead application rate is

a. $9.60.

b. $12.00.

c. $15.00.

d. $34.17.

In applying the high-low method, what is the unit variable cost?

Month Miles Total Cost

January 80,000 $192,000

February 50,000 160,000

March 70,000 158,000

April 90,000 260,000

a. $2.88

b. $2.50

c. $3.20

d. Cannot be determined from the information given.

Continue on previous question. In applying the high-low method, what is the fixed cost?

a. $35,000

b. $72,000

c. $28,000

d. $100,000

Expert Solution

Q 1: If overhead is applied using traditional costing based on direct labor hours, the overhead application rate is


	Applied overhead rate = Total expected cost / Total direct labor hr

		=(120000+297000+1500000+1200000+300000)/100000
		34.17

	therefore correct answer is option d $34.17


Q2 : In applying the high-low method, what is the unit variable cost?

		Miles	Total cost
	High	90000	260000
	Low	50000	160,000
	difference	40,000	100,000

	Therefore variable cost per unit = 100000/40000 =			2.5

	answer = option b $2.5

Q3 : Continue on previous question. In applying the high-low method, what is the fixed cost?

	Fixed cost= =260000-90000*2.5

			35000
	Answer = option a $35000

ekkarill92 answered 7 months ago

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

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...

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.

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,...

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

MAnufacturing overhead is applied on the basis of direct labor hours. The direct labor hours for...

MAnufacturing overhead is applied on the basis of direct labor hours. The direct labor hours for the period are 500 and the estimated manufacturing overhead is 2000. actual direct labor hours were 160 and actual overhead was 1000. Compute the manufacturing overhead applied during this period.

Pen enterprises estimated its overhead at $750,000 and direct labor hours at 15,000 for the the...

Pen enterprises estimated its overhead at $750,000 and direct labor hours at 15,000 for the the current fiscal month. determine the total product cost that had direct labor cost of $25,000, direct material costs of $20,000, and 2,000 direct labor hours.

Snowy Company calculates overhead on the basis of direct labor costs. Estimated overhead is $300,000 and...

Snowy Company calculates overhead on the basis of direct labor costs. Estimated overhead is $300,000 and estimated direct labor is $200,000. Actual direct labor was $215,000. Remember you can submit your calculations for possible partial credit. a) Calculate the Predetermined Overhead Rate $ = ______________per Direct Labor Cost b) Calculate the amount of overhead applied $ =____________

Overhead is applied on the basis of direct labor hours. Three direct labor hours are required...

Overhead is applied on the basis of direct labor hours. Three direct labor hours are required for each product unit. Planned production for the period was set at 8,000 units. Manufacturing overhead for the period is budgeted at $204,000, of which 30 percent is fixed. The 26,200 hours worked during the period resulted in production of 8,500 units. Manufacturing overhead cost incurred was $220,500. Required: a. Calculate the overhead spending variance: b. Calculate the overhead efficiency variance: c. Calculate the...

Direct Mateirals- $10,000 on this job Direct Labor- 400 hours at $10.00 Manufacturing Overhead- Estimated Rate-...

Direct Mateirals- $10,000 on this job Direct Labor- 400 hours at $10.00 Manufacturing Overhead- Estimated Rate- $15.00 per Direct Labor Hour Requirement 1: Students will create a Job Order Costing spreadsheet in Excel (with formulas) using the data presented in the video. Requirement 2: Using the Excel spreadsheet, complete a Job Order Costing spreadsheet for the following two customers: John Smith ordered five tree houses Jane Doe ordered three tree houses Requirement 3: Questions to be answered: 1. What is...