Question

In: Accounting

5) The Johny Pickles Brewing Company takes custom orders for seasonal brews and has two separate...

5) The Johny Pickles Brewing Company takes custom orders for seasonal brews and has two separate departments, brewing and packaging. The brewing department allocates overhead based on batches produced while the packaging department allocates overhead to orders based on machine hours worked in the department. The estimated overhead for the brewing department for the year is $18532 and the packaging department is estimated at $14413. It is estimated that the brewery will produce 253 batches during the year and will spend 1393 hours running the equipment to package those batches.  

At the end of the year, it is determined that 306 batches were actually produced and 1494 were used to package the product. The overhead amounts actually incurred by the brewing and packaging departments were $17664 and $12500 respectively.

What is the entry into the overhead account at the end of the year to balance the account? A credit would be entered as a negative and a debit as a positive. Round your answer to the whole dollar.

6) Hippity Hoppity Brew is a manufacturer of Small, Medium and Large size malting equipment for use in craft breweries across the United States and Canada. They are implementing an activity based cost (ABC) system and have compiled the following indirect cost information.

Cost Pool Estimated Cost Cost Driver Est Total Cost Driver
Equipment Maintenance $58813 Machine Hours 1500 Hours
Production Facility Costs $84262 Footprint (sqft) 20000 Square Feet
Order Processing Costs $15261 Num of Orders 200 Orders
Engineering Changes $34678 Num of Changes 50 Changes
Customer Relations $18678 Warranty Claims 30 Claims

During the period, the Medium sized equipment line at Hippity Hoppity Brew used 650 machine hours, used 6200 square feet of floor space, received 63 orders, experienced 13 engineering changes and had 8 warranty claims. $121058 of direct labor and $72300 of direct material were charged towards the Medium sized equipment line during the year.

Under the ABC system, how much indirect cost was charged to the Medium line during the year? round your answer to the whole dollar.

7) Hippity Hoppity Brew is a manufacturer of Small, Medium and Large size malting equipment for use in craft breweries across the United States and Canada. They are implementing an activity based cost (ABC) system and have compiled the following indirect cost information.

Cost Pool Estimated Cost Cost Driver Est Total Cost Driver
Equipment Maintenance $56347 Machine Hours 1500 Hours
Production Facility Costs $83518 Footprint (sqft) 20000 Square Feet
Order Processing Costs $25299 Num of Orders 200 Orders
Engineering Changes $36122 Num of Changes 50 Changes
Customer Relations $27915 Warranty Claims 30 Claims

During the period, the Medium sized equipment line at Hippity Hoppity Brew used 650 machine hours, used 6200 square feet of floor space, received 63 orders, experienced 13 engineering changes and had 8 warranty claims. $124560 of direct labor and $65776 of direct material were charged towards the Medium sized equipment line during the year.

Under the ABC system, how much total cost was charged to the Medium line during the year? round your answer to the whole dollar.

8) Sammy Skillet is hoping to make $3.51 on every gourmet breakfast bowl he sells at his recently opened restaurant. If his desired selling price is $7.73 per breakfast bowl, under the target pricing model, what are Sammy Skillet's target costs per breakfast bowl? Calculate your answer to two decimal places.

PLEASE SHOW ALL WORK IN EXCEL BY USING CONTROL~

Solutions

Expert Solution

6 Requirement
Under the ABC system calculation of how much total cost was charged to Medium Line during the year
Direct Material $72,300
Direct labour $121,058
Manufacturing Overhead
Equipment maintenance ($58813/1500*650 Hrs) $24,486
Production facility Costs($84262/20000*6200) $26,121
Order Processing Costs($15261/200*63) $4,807
Engineering Charges($34678/50*13) $9,016
Customer Relation($18678/30*8) $4,981
Total Cost Charged to Medium Line $262,769
7 Requirement
Under the ABC system calculation of how much total cost was charged to Medium Line during the year
Direct Material $65,776
Direct labour $124,560
Manufacturing Overhead
Equipment maintenance ($56347/1500*650 Hrs) $24,417
Production facility Costs($83518/20000*6200) $25,891
Order Processing Costs($36122/200*63) $11,378
Engineering Charges($36122/50*13) $9,392
Customer Relation($27915/30*8) $7,444
Total Cost Charged to Medium Line $268,858
8 The target cost is an approach in which companies set targets for its cost based on the rice
relevant in the market and profit margin they want to earn
So target Cost Selling Price-Profit Margin
Here target Cost $7.73-$3.51
$4.22 per breakfast Bowl
5 Allocation of Overheads based on the factors for each department
Brewing Department Packaging Department
Estimated OH $18,532 $14,413
Allocation Basis Batches Produced Machine Hrs
batches 253
Machine Hrs 1393
OH /Batch $73.25
OH/Machine Hr $10.35
Based in these the Overheads are applied
Brewing Department
Actual Batches 306
OH Cost per Batch $73.25
Total Overhead $22,414.50
Actual OH Cost $17,664
Overhead Overapplied $4,751.00
Packaging Department
Actual Machine Hrs 1494
OH Cost Per Machine Hr $10.35
Total Overhead $15,462.90
Actual OH Cost $12,500
Overhead Overapplied $2,962.90
Journal Entry
In the Books of Brewing
Manufacturing Overhead A/C $4,751.00
To Cost of Goods Sold $4,751.00
To record the overapplied overhead
Journal Entry
In the Books of Packaging
Manufacturing Overhead A/C $2,962.90
To Cost of Goods Sold $2,962.90
To record the overapplied overhead
In both the cases there is overapplied overheads in both brewing and packaging department

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