Deck Department Engine Department Direct materials 180,000 540,000 Direct labor 30,000 24,000 Manufacturing overhead 90,000 96,000...

	Deck Department	Engine Department
Direct materials	180,000	540,000
Direct labor	30,000	24,000
Manufacturing overhead	90,000	96,000

a. Instructions

Compute the following per-unit costs for the month of May.

A deck assembly transferred to the Engine Department.

Assembling an engine and installing it.

A completed lawnmower.

Materials used in assembling a deck.

Direct labor cost of assembling and installing an engine.

b. Which of these unit costs would be most useful to management in evaluating the overall monthly efficiency of the Engine Department? Explain your reasoning.

Note: There was no manufacture units given.

Solutions

Expert Solution

a. Cost per unit = total cost incurred / total no. of units
1. Cost per unit of deck assembly = ($180000+30000+90000) / 6000 = $50 per unit

2. Cost per unit of Assembling an engine and installing = ($540000+24000+96000) / 6000 = $110 per unit

3. Cost per unit of completed lawnmower = Cost per unit of Deck Department + Cost per unit of Engine Department
= $50 + $110 = $160

4. Cost per unit of Material used in Deck = Material consumed / No. of units
= $180000 / 6000 units = $30

5. Direct labor cost of assembling and installing an engine = Direct labor cost incurred / No. of units
= $24,000 / 6000 units = $4

b. In evaluating the overall monthly efficiency of the engine department the management should be more concerned with the cost per unit of the Engine department ($110) because this cost reflects the overall costs incurred in that department and the management should try to reduce this cost so that the profit of the company are increased.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Deck Department Engine Department Direct materials 180,000 540,000 Direct labor 30,000 24,000 Manufacturing overhead 90,000 96,000...

Deck Department Engine Department Direct materials 180,000 540,000 Direct labor 30,000 24,000 Manufacturing overhead 90,000 96,000 a. Instructions Compute the following per-unit costs for the month of May. A deck assembly transferred to the Engine Department. Assembling an engine and installing it. A completed lawnmower. Materials used in assembling a deck. Direct labor cost of assembling and installing an engine. b. Which of these unit costs would be most useful to management in evaluating the overall monthly efficiency of the...

Conversion costs are A. direct materials plus direct labor. B. direct materials plus manufacturing overhead. C....

Conversion costs are A. direct materials plus direct labor. B. direct materials plus manufacturing overhead. C. indirect materials plus indirect labor. D. direct labor plus manufacturing overhead.

Direct materials $ 8.50 Direct labor 11.00 Variable manufacturing overhead 2.30 Fixed manufacturing overhead 5.00 ($415,000...

Direct materials $ 8.50 Direct labor 11.00 Variable manufacturing overhead 2.30 Fixed manufacturing overhead 5.00 ($415,000 total) Variable selling expenses 4.70 Fixed selling expenses 3.00 ($249,000 total) Total cost per unit $ 34.50 A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 116,200 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales...

Compute the cost and efficiency variances for direct materials and direct labor. 2. For manufacturing overhead,...

Compute the cost and efficiency variances for direct materials and direct labor. 2. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. 3. HeadsetHeadset's management used better quality materials during September. Discuss the trade-off between the two direct material variances. Standard Cost Information Quantity Cost Direct Materials 2 parts $0.15 per part Direct Labor 0.02 hours 9.00 per hour Variable Manufacturing Overhead 0.02 hours 11.00 per hour Fixed Manufacturing Overhead...

Variable costs per unit: Manufacturing: Direct materials $ 27 Direct labor $ 13 Variable manufacturing overhead...

Variable costs per unit: Manufacturing: Direct materials $ 27 Direct labor $ 13 Variable manufacturing overhead $ 2 Variable selling and administrative $ 1 Fixed costs per year: Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 90,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $58 per unit. Assume...

Variable Cost Per Unit: Manufacturing: Direct Materials = $20 Direct Labor = $12 Variable Manufacturing Overhead...

Variable Cost Per Unit: Manufacturing: Direct Materials = $20 Direct Labor = $12 Variable Manufacturing Overhead = $4 Variable Selling and Administrative = $2 Fixed costs per year: Fixed manufacturing overhead = $960,000 Fixed selling and administrative expenses = $240,000 During its first year of Operations, produced 60,000 units and sold 60,000 units. During it's second year of operations, it produced 75,000 and sold 50,000 units. In its third year, it produced 40,000 units and sold 65,000 units. The selling...

1. Identify at least one example of a manufacturing cost (direct labor, direct materials, or overhead...

1. Identify at least one example of a manufacturing cost (direct labor, direct materials, or overhead costs) associated with value added activities a non-profit homeless shelter.. 2.Which one of these: direct labor, direct materials, or overhead costs are most prominent (make up more of a non-profit homeless shelters costs)? It is fine to conjecture on this answer. You may not have access to the data.

Case Prime Cost Conversion Cost Direct Materials Direct Labor Manufacturing Overhead Total Manufacturing Cost A 9,480...

Case Prime Cost Conversion Cost Direct Materials Direct Labor Manufacturing Overhead Total Manufacturing Cost A 9,480 16,460 4,040 11,020 B 10,010 7,330 25,200 42,540 C 55,700 110,300 42,300 D 48,150 19,900 11,750 68,050 E 14,000 24,300 56,200 For each of the following independent cases (A–E), compute the missing values in the table:

Variable costs per unit: Direct materials $ 10 Direct labor $ 8 Variable manufacturing overhead $...

Variable costs per unit: Direct materials $ 10 Direct labor $ 8 Variable manufacturing overhead $ 3 Variable selling and administrative expenses $ 6 Fixed costs per year: Fixed manufacturing overhead $ 117,000 Fixed selling and administrative expenses $ 320,000 During the last year, 29,250 units were produced and 24,000 units were sold. The Finished Goods inventory account at the end of the year shows a balance of $110,250 for the 5,250 unsold units. Required: 1. Determine whether the...

Match the following. 1.Direct labor, direct materials, and manufacturing overhead. a. Gross margin 2.Costs that are...

Match the following. 1.Direct labor, direct materials, and manufacturing overhead. a. Gross margin 2.Costs that are expensed in the period they are incurred. b.Controllable costs 3.Sales less variable expenses. c. Manufacturing margin 4.Cost a manager can determine or greatly affect the amount. d. Absorption costing 5.A costing method that includes only variable manufacturing costs. e. Period costs 6.An income statement format that focuses on cost behavior. f. Contribution margin 7.Sales less cost of goods sold. g. Variable costing 8.A costing...

Subjects