Question

In: Accounting

Mudcat Corporation has four categories of overhead, with expected costs for next year as follows.                  ...

Mudcat Corporation has four categories of overhead, with expected costs for next year as follows.

                  Maintenance                                                                        $750,000

                  Materials Handling                                                                 260,000

                  Inspection                                                                              470,000

                  Setups                                                                                   245,000

Job #58 is scheduled for next year and has the following estimates:

                  Direct materials                                        $48,000

                  Direct labor (2,000 hours)                         $56,000

                  Number of inspections                                      95

                  Number of setups                                             88

                  Number of machine hours                            4,500

                  Number of materials moves                             185

Sixty thousand direct labor hours are budgeted for next year. Expected activity for the activity-based cost drivers that could be used are:

                  Machine hours                                           34,000

                  Material moves                                          18,000

                  Setups                                                       31,000

                  Quality inspections                                     37,000

Determine the total cost of Job #58 if activity-based costing is used: $ ___________________

Solutions

Expert Solution

Computation of total cost for Job #58
Particulars Amount in $
Direct materials cost                       48,000
Direct labour cost                       56,000
Inspection cost (95 inspections @ $12.70)                         1,207 Refer Note 1
Setup cost (88 setups @ $7.90)                            695 Refer Note 1
Maintenance cost (4500 machine hours @ $22.06)                       99,270 Refer Note 1
Materials handling cost (185 material moves @ $14.44)                         2,671 Refer Note 1
Total cost for Job #58                   2,07,843
Note 1:
Calculation of cost-driver rates
Activity Cost driver Total budgeted activity cost ($) - A Budgeted no. of cost drivers - Budgeted cost-driver rate (A / B)
Maintenance Machine hours                   7,50,000                  34,000                             22.06
Materials handling Material moves                   2,60,000                  18,000                             14.44
Inspection Quality inspections                   4,70,000                  37,000                             12.70
Setup Setups                   2,45,000                  31,000                                7.90

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Wheat Manufacturing has four categories of overhead. The four categories and the expected overhead costs for...
Wheat Manufacturing has four categories of overhead. The four categories and the expected overhead costs for each category for next year are as follows: Wheat Manufacturing has four categories of overhead. The four categories and the expected overhead costs for each category for next year are as follows: Maintenance £120,000 Materials handling £18,000 Setups £16,000 Inspection £60,000 The company has been asked to determine the full cost for a proposed job. Estimates for the proposed job are as follows: Direct...
Question 4 Brown Manufacturing has four categories of overhead. The four categories and expected overhead costs...
Question 4 Brown Manufacturing has four categories of overhead. The four categories and expected overhead costs for each category for next year are listed below: N$ Maintenance 200 000 Materials handling 32 000 Setups 100 000 Inspection 120 000 Currently, overhead is applied using a predetermined overhead rate based upon budgeted direct labour hours. For next year, 50 000 direct labour hours are budgeted. The company has accepted a new job and the sales manager wanted to have a cost...
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...
Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year:...
Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year: Total overhead budgeted = $200,000 Total direct labor hours budgeted = 2,000 hours Actual direct labor hours worked on Job 21 = 100 Actual direct materials = $5,000 total Actual direct labor = $3,000 total Actual units completed = 100 The totoal cost of Job 21 is: a. $ 22,500 b. $ 16,000 c. $ 18,000 d. $ 19,900 The Total Cost of Job...
The yield to maturity for 10-year bonds is as follows for four different bond rating categories....
The yield to maturity for 10-year bonds is as follows for four different bond rating categories. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Aaa 8.60% Aa1 8.80% Aa2 9.00% Aa3 10.00% The bonds of Falter Corporation were rated as Aa1 and issued at par a few weeks ago. The bonds have just been downgraded to Aa3. Determine the new price of the bonds, assuming a...
Full Boat Manufacturing has projected sales of $122.5 million next year. Costs are expected to be...
Full Boat Manufacturing has projected sales of $122.5 million next year. Costs are expected to be $72.8 million and net investment is expected to be $14.4 million. Each of these values is expected to grow at 12 percent the following year, with the growth rate declining by 2 percent per year until the growth rate reaches 4 percent, where it is expected to remain indefinitely. There are 6.2 million shares of stock outstanding and investors require a return of 11...
Eberhart Manufacturing has projected sales of $145.8 million next year. Costs are expected to be $81.4...
Eberhart Manufacturing has projected sales of $145.8 million next year. Costs are expected to be $81.4 million and net investment is expected to be $15.4 million. Each of these valued is expected to grow at 15 percent the following year, with the growth rate declining by 2 percent per year until the growth rate reaches 7 percent, where it is expected to remain indefinitely. There are 5.9 million shares of stock outstanding and investors require a return of 14 percent...
Fincher Manufacturing has projected sales of $147.2 million next year. Costs are expected to be $82.1...
Fincher Manufacturing has projected sales of $147.2 million next year. Costs are expected to be $82.1 million and net investment is expected to be $16.1 million. Each of these values is expected to grow at 16 percent the following year, with the growth rate declining by 2 percent per year until the growth rate reaches 8 percent, where it is expected to remain indefinitely. There are 6.6 million shares of stock outstanding and investors require a return of 15 percent...
Fincher Manufacturing has projected sales of $147.2 million next year. Costs are expected to be $82.1...
Fincher Manufacturing has projected sales of $147.2 million next year. Costs are expected to be $82.1 million and net investment is expected to be $16.1 million. Each of these values is expected to grow at 16 percent the following year, with the growth rate declining by 2 percent per year until the growth rate reaches 8 percent, where it is expected to remain indefinitely. There are 6.6 million shares of stock outstanding and investors require a return of 15 percent...
Full Boat Manufacturing has projected sales of $119 million next year. Costs are expected to be...
Full Boat Manufacturing has projected sales of $119 million next year. Costs are expected to be $70 million and net investment is expected to be $13.4 million. Each of these values is expected to grow at 10 percent the following year, with the growth rate declining by 1 percent per year until the growth rate reaches 6 percent, where it is expected to remain indefinitely. There are 5.5 million shares of stock outstanding and investors require a return of 12...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT