Question
In: Accounting
Hakara Company has been using direct labor costs as the basis for assigning overhead to its...
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Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system product A has been assigned overhead of $31.58 per unit while product B has been assigned $8.69 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information:
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The following cost information pertains to the production of A and B, just two of its many products:
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1. Use activity-based costing to determine a unit cost for each product.
2. Comment on Managements belief that the ABC system will generate an overhead allocation that is more accurate than the volume based system currently in use.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Hakara Company has been using direct labor costs as the basis for assigning overhead to its...
Hakara Company has been using direct labor costs as the basis
for assigning overhead to its many products. Under this allocation
system product A has been assigned overhead of $24.08 per unit
while product B has been assigned $11.37 per unit. Management feels
that an ABC system will provide a more accurate allocation of the
overhead costs and has collected the following cost pool and cost
driver information:
Cost Pools
Activity Costs
Cost
Driver
Driver
Consumption
Machine setup
$ 396,000...
Hakara Company has been using direct labor costs as the basis for assigning overhead to its...
Hakara Company has been using direct labor costs as the basis
for assigning overhead to its many products. Under this allocation
system product A has been assigned overhead of $24.82 per unit
while product B has been assigned $13.58 per unit. Management feels
that an ABC system will provide a more accurate allocation of the
overhead costs and has collected the following cost pool and cost
driver information:
Cost Pools
Activity Costs
Cost Driver
Driver Consumption
Machine setup
158,000
Setup...
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 $ =____________
The Littlefield Company applies manufacturing overhead costs to products on the basis of direct labor-hours. The...
The Littlefield Company applies manufacturing overhead costs to
products on the basis of direct labor-hours. The standard cost card
shows that 12 direct labor-hours are required per unit of product.
For August, the company budgeted to work 360,000 direct labor-hours
and to incur the following total manufacturing overhead costs:
Total fixed overhead costs
$475,200
Total variable overhead costs
$396,000
During August, the company completed 28,000 units of product,
worked 344,000 direct labor-hours, and incurred the following total
manufacturing overhead costs:...
THE Company applies overhead costs to jobs using direct labor cost as an activity. For the...
THE Company applies overhead costs to jobs using direct
labor cost as an activity. For the current year, THE
Company reported estimated overhead cost of $500,000
while the actual overhead cost totaled $510,000. THE's
estimated direct labor cost was $200,000 while the
actual direct labor cost was $220,000. For the current
year, overhead was:
Group of answer choices
under-applied by $10,000
under-applied by $20,000
under-applied by $30,000
under-applied by $40,000
over-applied by $10,000
over-applied by $20,000
over-applied by $30,000
over-applied...
Aspen Company estimates its manufacturing overhead to be $1,121,000 and its direct labor costs to be...
Aspen Company estimates its manufacturing overhead to be
$1,121,000 and its direct labor costs to be $590,000 for year 2.
Aspen worked on three jobs for the year. Job 2-1, which was sold
during year 2, had actual direct labor costs of $178,000. Job 2-2,
which was completed, but not sold at the end of the year, had
actual direct labor costs of $303,000. Job 2-3, which is still in
work-in-process inventory, had actual direct labor costs of
$128,000. Actual...
Aspen Company estimates its manufacturing overhead to be $631,250 and its direct labor costs to be...
Aspen Company estimates its manufacturing overhead to be
$631,250 and its direct labor costs to be $505,000 for year 2.
Aspen worked on three jobs for the year. Job 2-1, which was sold
during year 2, had actual direct labor costs of $195,600. Job 2-2,
which was completed, but not sold at the end of the year, had
actual direct labor costs of $326,000. Job 2-3, which is still in
work-in-process inventory, had actual direct labor costs of
$130,400. Actual...
Aspen Company estimates its manufacturing overhead to be $625,000 and its direct labor costs to be...
Aspen Company estimates its manufacturing overhead to
be $625,000 and its direct labor costs to be $500,000 for year 2.
Aspen worked on three jobs for the year. Job 2-1, which was sold
during year 2, had actual direct labor costs of $195,000. Job 2-2,
which was completed, but not sold at the end of the year, had
actual direct labor costs of $325,000. Job 2-3, which is still in
work-in-process inventory, had actual direct labor costs of
$130,000. Actual...
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.
Freytag Corporation's variable overhead is applied on the basis of direct labor-hours. The company has established...
Freytag Corporation's
variable overhead is applied on the basis of direct labor-hours.
The company has established the following variable overhead
standards for product N06C:
Standard direct
labor-hours
3.7
hours per unit of
N06C
Standard variable overhead
rate
$
5.50
per hour
The following data
pertain to the most recent month's operations during which 1,800
units of product N06C were made:
Actual direct
labor-hours worked
6,500
Actual variable overhead
incurred
$
36,640
Required:
a. What was the
variable overhead rate variance...
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