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Shalder Custom Fridges uses a job costing system to measure and track product costs for its...

Shalder Custom Fridges uses a job costing system to measure and track product costs for its line of custom-made, highly prestigious premium quality fridges, to allocate overhead costs to its products. Overhead costs are expected to be $110 000. The best estimate for production time in the upcoming year is 22 000 direct labour hours. Production data for the first quarter of the year for the following four types of custom fridges (Freeze, Winter, Ice, and Snow fridge types) is given below:
Freeze Winter Ice Snow
Direct materials used ($) 20,000                  17,000                      14,000                        15,000
Direct labour cost ($)    13,000                 12,000                   8,000                          9,000
Direct labour hours        3,200                      3, 000                2, 900                   2,900
Required
(A) Calculate the predetermined overhead rate based on direct labour hours.                           
(B) Calculate the overhead cost to be assigned to the four fridge types, separately.           
(C) Calculate the total manufacturing cost for each of the four fridge types.                 
(D) At the end of the first quarter, Shalder Custom Fridges found that they have incurred $21 500 for actual overhead. Calculate the overhead variance for the first quarter.                           
(E)How might the company improve its product costing system? Please consider the overhead cost driver being used in answering this question.                        

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ekkarill92 answered 2 years ago
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