Top of Form Calculate and Use Overhead Rate During the coming accounting year, Baker Manufacturing, Inc.,...

Top of Form

Calculate and Use Overhead Rate

During the coming accounting year, Baker Manufacturing, Inc., anticipates the following costs, expenses, and operating data:

Direct material (16,000 lb.)	$ 80,000
Direct labor (@ $10/hr.)	140,000
Indirect material	12,000
Indirect labor	22,000
Sales commissions	34,000
Factory administration	16,000
Non factory administrative expenses	20,000
Other manufacturing overhead*	48,000
*Provides for operating 35,000 machine hours.

a. Calculate the predetermined manufacturing overhead rate for the coming year for each of the following application bases: (1) direct labor hours, (2) direct labor costs, and (3) machine hours.Round direct labor hours and machine hours answers to two decimal places, when applicable. Round direct labor costs to the nearest one decimal place percentage, when applicable (example: 76.4%).

Application base	Manufacturing overhead rate
Direct labor hours	$Answer
Direct labor costs	%Answer
Machine hours	Answer

b. For each item in requirement a, determine the proper application of manufacturing overhead to Job 63, to which 16 direct labor hours, $150 of direct labor cost, and 40 machine hours have been charged. Round answers to two decimal places, when applicable.

Application base	Overhead applied to Job 63
Direct labor hours	Answer
Direct labor costs	Answer
Machine hours

Expert Solution

a. Calculate the predetermined manufacturing overhead rate for the coming year for each of the following application bases: (1) direct labor hours, (2) direct labor costs, and (3) machine hours.Round direct labor hours and machine hours answers to two decimal places, when applicable. Round direct labor costs to the nearest one decimal place percentage, when applicable (example: 76.4%).

Application base	Manufacturing overhead rate
Direct labor hours	98000/14000 = 7 per hour
Direct labor costs	98000/140000 = 70%
Machine hours	98000/35000 = 2.8 per machine hour

b. For each item in requirement a, determine the proper application of manufacturing overhead to Job 63, to which 16 direct labor hours, $150 of direct labor cost, and 40 machine hours have been charged. Round answers to two decimal places, when applicable.

Application base	Overhead applied to Job 63
Direct labor hours	16*7 = 112
Direct labor costs	150*.70 = 105
Machine hours	40*2.8 = 112

ekkarill92 answered 1 year ago

Redmar, Inc. manufactures custom campers. They use a costing system with one rate of manufacturing overhead....

Redmar, Inc. manufactures custom campers. They use a costing system with one rate of manufacturing overhead. In this system, they apply manufacturing overhead based on the direct labor hours. Below are the estimated costs (both period and product), estimated number of campers to be produced this year, and estimated direct labor hours per camper for the year-ended 2018. Cost Amount Indirect Production Labor $ 75,000 Factory Insurance $ 15,400 Factory Utilities $ 30,800 Marketing expense $ 57,700...

Halcyon Company expects to incur $300,000 in manufacturing overhead for the coming year. The company makes...

Halcyon Company expects to incur $300,000 in manufacturing overhead for the coming year. The company makes two products, A and B, and it has accumulated the following budget information for the products: Product A Product B Total Number of units to be produced 10,000 5,000 15,000 Direct Labor Hours 2 per unit 1 per unit 25,000 Machine hours 2 per unit 2 per unit 30,000 1) Assume that Halcyon allocates manufacturing overhead cost using direct labor hours. Amount of overhead...

Aberwald Corporation expects to order 126,000 memory chips for inventory during the coming year, and it will use this inventory at a constant rate.

Aberwald Corporation expects to order 126,000 memory chips for inventory during the coming year, and it will use this inventory at a constant rate. Fixed ordering costs are $200 per order, the purchase price per chip is $25, and the firm's inventory carrying costs is equal to 20% of the purchase price. (Assume a 360-day year.)Refer to Scenario: Aberwald. If Aberwald holds a safety stock equal to a 30-day supply of chips, what is Aberwald's minimum cost of ordering and...

Compute the company's predetermined overhead rate for the year, calculate the total overhead applied, and determine the amount of under or over applied overhead in the year.

Logan Products computes its predetermined overhead rate annually on the basis of machine-hours. At the beginning of the year, it estimated that its total manufacturing overhead would be $348,000 and machines would be run a total of 20,000 hours. Its actual total manufacturing overhead for the year was $336,400 and its actual total machine-hours was 19,500 hours. Required: Compute the company's predetermined overhead rate for the year, calculate the total overhead applied, and determine the amount of under...

Knitpix Products is a division of Parker Textiles Inc. During the coming year, it expects to...

Knitpix Products is a division of Parker Textiles Inc. During the coming year, it expects to earn income Of $310,000 based on sales of $3.45 million; without any new investments, the division will have average operating assets of $3 million. The division is considering a capital investment project—adding knitting machines to produce gaiters— that requires an additional investment of $600,000 and increases net income by $57,500 (sales would increase by $575,000). If made, the investment would increase beginning operating assets...

I need to calculate the variable costs, DLH, Fixed costs and the manufacturing overhead rate per...

I need to calculate the variable costs, DLH, Fixed costs and the manufacturing overhead rate per direct labor hour for each quarter and year-end. I've done some calculation but I believe I am missing something in the variable costs calculations with the indirect materials, indirect labor hours and maintenance. I have been multiplying the indirect costs by DLH, but some of my instructions indicate I am supposed to divide it. Not sure if I am misinterpreting or just missing a...

Jardine Ltd is developing factory overhead rates for the coming year. Budgeted overhead costs for the...

Jardine Ltd is developing factory overhead rates for the coming year. Budgeted overhead costs for the five factory departments are as follows: Cost ($) Cost Driver Milling 79,500 Machine hours Finishing 84,600 Direct labour hours Maintenance 40,500 Repair hours Factory storeroom 52,800 Requisitions Factory office 37,800 No. of employees Total $295,200 Estimated operating statistics for the coming year are: Departments Repair hours No. of Requisitions No. of employees Machine hours Direct labour Hours Production: Milling...

how to calculate the overhead cost applied to a job in accounting

Top Notch Music Inc. produces car stereos. During the year Top Notch Music produced 7,000 stereos....

Top Notch Music Inc. produces car stereos. During the year Top Notch Music produced 7,000 stereos. Materials and labor standards for producing these units are as follows: Direct materials (1 electronic component kit @ $200) 200 Direct labor (10 hours @ $15) 150 Required: A. Compute the direct material price and usage variances. Electronic kits purchased and used were 6,800 kits at an actual price of $180 per kit. B. Compute the direct labor rate and efficiency variances. 68,000 labor...

. Descriptive information and graphical displays of the top three reasons coming to the university (use...

. Descriptive information and graphical displays of the top three reasons coming to the university (use Statcrunch) [GO to Stat, Tables, Frequency, Select columns (use SHIFT Key to choose the block of variables). Select Statistics: Choose all five (use Ctrl key), Compute]. You see the output. Look for the top three reasons to report in (a). Use table to summarize the frequency of ‘reasons’ for choosing the university. What are the top three reasons: [1: Yes, and 0: No]...

Question