Question

1)Blackwelder Factory produces two similar products-small lamps and desk lamps. The total plant overhead budget is $680,000 with 511,000 estimated direct labor hours. It is further estimated that small lamp production will require 257,000 direct labor hours and desk lamp production will need 254,000 direct labor hours.

Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Blackwelder Factory allocate to desk lamp production if actual direct hours for the period is 187,000.

a.$500,630

b.$934,545

c.$248,710

d.$431,290

2)Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.

				Activity Cost							Activity Base
Procurement				$310,900							Number of purchase orders
Scheduling				$207,500							Number of production orders
Materials handling				$439,900							Number of moves
Product development				$768,300							Number of engineering changes
Production				$1,408,300							Machine hours
	Number of Purchase Orders			Number of Production Orders				Number of Moves			Number of Engineering Changes				Machine Hours			Number of Units
Disk drives	4,180			360				1,220			10				1,600			1,900
Tape drives	1,600			135				510			6				10,000			3,700
Wire drives	11,300			930				4,000			28				10,800			2,400

Determine the activity-based cost for each disk drive unit.

a.$756.69

b.$222

c.$18.2

d.$261.77

3)The Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below.

Product	Number of Units	Labor Hours Per Unit	Machine Hours Per Unit
Blinks	1,037	2	7
Dinks	1,985	4	8

All of the machine hours take place in the Fabrication department, which has an estimated overhead of $87,100. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $82,700.

The Ramapo Company uses a single overhead rate to apply all overhead costs. What would the single plantwide rate be if it was based on machine hours instead of labor hours?

a.$9.17 per machine hour

b.$5.87 per machine hour

c.$7.34 per machine hour

d.$16.88 per machine hour

4)Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.

				Activity Cost							Activity Base
Procurement				$362,400							Number of purchase orders
Scheduling				$204,200							Number of production orders
Materials handling				$447,100							Number of moves
Product development				$753,900							Number of engineering changes
Production				$1,539,800							Machine hours
	Number of Purchase Orders			Number of Production Orders				Number of Moves			Number of Engineering Changes				Machine Hours			Number of Units
Disk drives	3,820			410				1,340			13				2,200			2,200
Tape drives	2,100			165				720			4				8,500			3,800
Wire drives	12,300			910				3,800			27				10,600			2,400

Determine the activity rate per production order for scheduling.

a.$137.51

b.$19.89

c.$244.04

d.$72.29

5)The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments—Fabrication and Assembly. Data for the products and departments are listed below.

Product	Number of Units	Labor Hours Per Unit	Machine Hours Per Unit
Rings	1,140	6	3
Dings	2,020	3	9

All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $85,000. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $73,400.

The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours.

What is the overhead cost per unit for Rings?

a.$50.13

b.$52.53

c.$45.96

d.$5.57

Answer 1

1.
	Predeterminded Overhead rate	Estimated Overhead/Estimated Hours
		680000/511000
		$ 1.33
	Overhead Allocated to Desk	Hour* Rate
		187000*1.33
		$ 248710
2.
				Number of				Number			Number of							Number
	Number of			Production				of			Engineering				Machine			of
	Purchase			Orders				Moves			Changes				Hours			Units		Total
	Orders																				Per unit
	Disk drives	4,180	76087		360	52421			1,220	93661		10	174614			1,600	100593		1,900	497375	261.7765
	Tape drives	1,600	29124		135	19658			510	39153		6	104768			10,000	628705		3,700	821409	222.0024
	Wire drives	11,300	205689		930	135421			4,000	307086		28	488918			10,800	679002		2,400	1816116	756.7149
	Total	17,080	310900		1,425	207500			5,730	439900		44	768300			22,400	1408300			3134900
3.		No of Units	Labor Hour per unit	Machine Hour per unit	Total Labor Hour	Total Machine Hour
	Blinks	1037	2	7	2074	7259
	Dlinks	1985	4	8	7940	15880
					10014	23139
	Overhead	82700+87100	169800
	Overhead Rate	169800/23139	7.34
4.
				Number of				Number			Number of							Number
	Number of			Production				of			Engineering				Machine			of
	Purchase			Orders				Moves			Changes				Hours			Units
	Orders
	Disk drives	3,820	75981		410	56378	137.51		1,340	102238		13	222743			2,200	159040		2,200	616381
	Tape drives	2,100	41769		165	22689	137.51		720	54934		4	68536			8,500	614474		3,800	802403
	Wire drives	12,300	244650		910	125133	137.51		3,800	289928		27	462620			10,600	766285		2,400	1888617
		18,220	3,62,400		1,485	2,04,200			5,860	4,47,100		44	7,53,900			21,300	15,39,800		8,400	33,07,400
				Number of
				Production
				Orders
					410	56378	137.51
					165	22689	137.51
					910	125133	137.51
5
		No of Units	Labor Hour per unit	Machine Hour per unit	Total Labor Hour	Total Machine Hour	Total
	Rings	1140	6	3	6840	3420
	Dings	2020	3	9	6060	18180
					12900	21600
	Overheads				73400	85000
	Pre Ovh Rates				5.69	3.94
	Rings Overhead				38,919.07	13,458.33	52,377.40
	Units						1140
	Per Unit						45.95