Question
In: Accounting
Exercise 4-6 Assigning overhead costs using the plantwide rate and departmental rate methods LO P1, P2...
Exercise 4-6 Assigning overhead costs using the plantwide rate and departmental rate methods LO P1, P2
Laval produces lamps and home lighting fixtures. Its most
popular product is a brushed aluminum desk lamp. This lamp is made
from components shaped in the fabricating department and assembled
in the assembly department. Information related to the 33,000 desk
lamps produced annually follows.
| Direct materials | $ | 270,000 | |
| Direct labor | |||
| Fabricating department (6,000 DLH × $28 per DLH) | $ | 168,000 | |
| Assembly department (16,000 DLH × $29 per DLH) | $ | 464,000 | |
| Machine hours | |||
| Fabricating department | 14,700 | MH | |
| Assembly department | 20,300 | MH | |
Expected overhead cost and related data for the two production
departments follow.
| Fabricating | Assembly | |||||
| Direct labor hours | 190,000 | DLH | 325,000 | DLH | ||
| Machine hours | 169,000 | MH | 121,000 | MH | ||
| Overhead cost | $ | 330,000 | $ | 405,000 | ||
Required
1. Determine the plantwide overhead rate for Laval
using direct labor hours as a base.
2. Determine the total manufacturing cost per unit
for the aluminum desk lamp using the plantwide overhead rate.
3. Compute departmental overhead rates based on
machine hours in the fabricating department and direct labor hours
in the assembly department.
4. Use departmental overhead rates from
requirement 3 to determine the total manufacturing cost per unit
for the aluminum desk lamps.
Solutions
Expert Solution
| Particulars | Units | ||||||||||
| Total Units | 33,000 | ||||||||||
| Particulars | Amt | ||||||||||
| Direct Material | 270000 | ||||||||||
| Direct Labor: | DLH | MH | |||||||||
| F Dept | 168000 | F Dept | 6000 | 14700 | 28.00 | ||||||
| A Dept | 464000 | A Dept | 16000 | 20300 | 29.00 | ||||||
| Total | 22000 | 35000 | |||||||||
| Units | 33000 | 33000 | |||||||||
| F Dept | A Dept | Total | PU Hours | 0.67 | 1.06 | ||||||
| Overhead Cost | 330000 | 405000 | 735000 | ||||||||
| DLH | 190000 | 325000 | 515000 | ||||||||
| 1 | Plant Wide OH Rate (TotalOH/Total DLH) | 1.43 | |||||||||
| 2 | Total Manufacturing Cost: | PU | |||||||||
| Direct Material | 8.18 | (DM/Units) | |||||||||
| Direct Labor: | |||||||||||
| Fabrication Dept | 5.09 | (DL F Dep/Units) | |||||||||
| Assembly Dept | 14.06 | (DL A Dep/Units) | |||||||||
| Overhead Allocated | 0.95 | ||||||||||
| (6000+16000)*1.43)/Units | |||||||||||
| Total Cost | 28.28 | ||||||||||
| 3 | Departmentwise OH Rate: | ||||||||||
| Department Name | Allocation Base | Overhead | Total Base | Rate per Base | |||||||
| Fabrication Dept | MH | 330000 | 169000 | 1.95 | |||||||
| Assembly Dept | DLH | 405000 | 325000 | 1.25 | |||||||
| 4 | Total Manufacturing Cost: | PU | |||||||||
| Direct Material | 8.18 | (DM/Units) | |||||||||
| Direct Labor: | |||||||||||
| Fabrication Dept | 5.09 | (DL F Dep/Units) | |||||||||
| Assembly Dept | 14.06 | (DL A Dep/Units) | |||||||||
| Overhead Allocated | |||||||||||
| Fabrication Dept | 0.87 | (14700*1.95)/Units | |||||||||
| Assembly Dept | 0.60 | (16000*1.25)/Units | |||||||||
| Total Cost | 28.81 | ||||||||||
ekkarill92 answered 1 year agoRelated Solutions
Exercise 4-7 Using the plantwide overhead rate to assess prices LO P1 Way Cool produces two...
Exercise 4-7 Using the plantwide overhead rate to assess prices
LO P1
Way Cool produces two different models of air conditioners. The
company produces the mechanical systems in their components
department. The mechanical systems are combined with the housing
assembly in its finishing department. The activities, costs, and
drivers associated with these two manufacturing processes and the
production support process follow. (Loss amounts should be
indicated with a minus sign. Round your intermediate calculations
and round "Cost per unit and...
A) Exercise 4-8 Using departmental overhead rates to assess prices LO P2 Way Cool produces two...
A) Exercise 4-8 Using departmental overhead rates to assess
prices LO P2
Way Cool produces two different models of air conditioners. The
company produces the mechanical systems in their components
department. The mechanical systems are combined with the housing
assembly in its finishing department. The activities, costs, and
drivers associated with these two manufacturing processes and the
production support process follow.
Process
Activity
Overhead Cost
Driver
Quantity
Components
Changeover
$
458,000
Number of batches
870
Machining
313,000
Machine hours
8,320...
Exercise 17-8 Using the plantwide overhead rate to assess prices LO P1 Way Cool produces two...
Exercise 17-8 Using the plantwide overhead rate to assess prices
LO P1
Way Cool produces two different models of air conditioners. The
company produces the mechanical systems in its components
department. The mechanical systems are combined with the housing
assembly in its finishing department. The activities, costs, and
drivers associated with these two manufacturing processes and the
production support process follow. (Loss amounts should be
indicated with a minus sign. Round your intermediate calculations
and round "Cost per unit and...
Problem 17-1A Comparing costs using ABC with the plantwide overhead rate LO P1, P3, A1, A2...
Problem 17-1A Comparing costs using ABC with the plantwide
overhead rate LO P1, P3, A1, A2
The following data are for the two products produced by Tadros
Company.
Product A
Product B
Direct materials
$
13 per unit
$
25 per unit
Direct labor hours
0.6 DLH per unit
1.5 DLH per unit
Machine hours
0.5 MH per unit
1.1 MH per unit
Batches
120 batches
240 batches
Volume
10,000 units
2,000 units
Engineering modifications
9 modifications
45 modifications
Number...
Problem 17-1A Comparing costs using ABC with the plantwide overhead rate LO P1, P3, A1, A2...
Problem 17-1A Comparing costs using ABC with the plantwide
overhead rate LO P1, P3, A1, A2
The following data are for the two products produced by Tadros
Company.
Product A
Product B
Direct
materials
$
14 per unit
$
27 per unit
Direct labor hours
0.5 DLH per unit
1.5 DLH per unit
Machine hours
0.4 MH per unit
1.1 MH per unit
Batches
105 batches
210 batches
Volume
10,000 units
2,000 units
Engineering modifications
9 modifications
45 modifications
Number...
Problem 17-1A Comparing costs using ABC with the plantwide overhead rate LO P1, P3, A1, A2...
Problem 17-1A Comparing costs using ABC with the plantwide
overhead rate LO P1, P3, A1, A2
The following data are for the two products produced by Tadros
Company.
Product A
Product B
Direct
materials
$
14 per unit
$
25 per unit
Direct labor hours
0.6 DLH per unit
1.5 DLH per unit
Machine hours
0.5 MH per unit
1.1 MH per unit
Batches
110 batches
220 batches
Volume
10,000 units
2,000 units
Engineering modifications
8 modifications
40 modifications
Number...
Exercise 4-8 Using departmental overhead rates to assess prices LO P2 Way Cool produces two different...
Exercise 4-8 Using departmental overhead rates to assess prices
LO P2
Way Cool produces two different models of air conditioners. The
company produces the mechanical systems in their components
department. The mechanical systems are combined with the housing
assembly in its finishing department. The activities, costs, and
drivers associated with these two manufacturing processes and the
production support process follow.
Process
Activity
Overhead Cost
Driver
Quantity
Components
Changeover
$
458,000
Number of batches
870
Machining
313,000
Machine hours
8,320
Setups...
Integration Exercise 6 Plantwide and Departmental Overhead Allocation; Activity-Based Costing; Segmented Income Statements [LO 2-1, LO...
Integration Exercise 6 Plantwide and Departmental Overhead
Allocation; Activity-Based Costing; Segmented Income Statements [LO
2-1, LO 2-2, LO 2-3, LO 2-4, LO 6-4, LO 6-5, LO 7-1, LO 7-3, LO
7-4]
Koontz Company manufactures two models of industrial
components—a Basic model and an Advanced Model. The company
considers all of its manufacturing overhead costs to be fixed and
it uses plantwide manufacturing overhead cost allocation based on
direct labor-hours. Koontz’s controller prepared the segmented
income statement that is shown below...
Integration Exercise 4 Plantwide and Departmental Overhead Allocation; Activity-Based Costing; Segmented Income Statements [LO 3-1, LO...
Integration Exercise 4 Plantwide and Departmental Overhead
Allocation; Activity-Based Costing; Segmented Income Statements [LO
3-1, LO 3-2, LO 3-3, LO 3-4, LO 4-4, LO 4-5, LO 5-1, LO 5-3, LO
5-4]
Koontz Company manufactures two models of industrial
components—a Basic model and an Advanced Model. The company
considers all of its manufacturing overhead costs to be fixed and
it uses plantwide manufacturing overhead cost allocation based on
direct labor-hours. Koontz’s controller prepared the segmented
income statement that is shown below...
Exercise 17-8 Using departmental overhead rates to assess prices LO P2 Way Cool produces two different...
Exercise 17-8 Using departmental overhead rates to assess prices
LO P2 Way Cool produces two different models of air conditioners.
The company produces the mechanical systems in their components
department. The mechanical systems are combined with the housing
assembly in its finishing department. The activities, costs, and
drivers associated with these two manufacturing processes and the
production support process follow. Process Activity Overhead Cost
Driver Quantity Components Changeover $ 452,000 Number of batches
790 Machining 313,000 Machine hours 7,920 Setups...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- PUT IN JAVA PROGRAMMING LANGUAGE The Rectangle class: Design a class named Rectangle to represent a...
- Journal article summary on inter-group conflict Peer Reviewed Journal article from past 3 years. Please include...
- "Ethical Considerations" Please respond to the following: Reflect upon the responsibilities placed on auditors by the...
- A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par...
- What is the difference among the principles of modularization, abstraction, encapsulation, and separation of interface and...
- An investment project costs $20,100 and has annual cash flows of $4,400 for six years. ...
- PUT IN JAVA PROGRAMMING The StockB class: Design a class named StockB that contains the following...
ADVERTISEMENT