Question
In: Accounting
how is general factory estimated overhead cost found?
how is general factory estimated overhead cost found?
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Expert Solution
Factory overheads are the costs incurred during manufacturing
other than Direct Material Cost and Direct Labour Cost.
These costs are directly associated with operating the
production.
Examples of Factory overheads are Electricity, fuel, Indirect
labour, Indirect Material, repair of manufacturing plant etc.
Estimated Overhead is calculated before period begins. For determining estimated Factory overhead, There is no definative rules.
Factory Overhead costs can be fixed, Variable and Mixed. Based on past record, company can estimate factory Overhead. It can estimate Total Factory Overhear, Activity Base, Cost Base etc
Overheads are generally expressed in percentange of Sales, Material Cost, Labour Cost etc. This base of the percentage depends on the nature of overhead and its direct relation with sales, Material or Labour.
For Example, If Factory cost is 50% of Direct Labour. Amount of Direct labour is $10000. Then Estimated Factory Overhead will be $5000.
Estimated overhead cost can be calculated by using Machine
hours, Labour hours or No of units produced.
For example - If total factory overhead in a year in $50000 and no
of labour hour is 10000. Then Estimated factory overhead will be =
$5 per labour hour.
The selection of basis (i.e Machine hours, Labour Hours or Units) depends on 'Direct relationship' of Factory Overheads with these basis.
Apart from Above methods, Factory Overhead can be estimated
based of Activities.
For example - If total Setup cost in a year is $5000 and total
Setup Hours is 1000. Then Estimated Setup Cost = $5 per setup
hour.
ekkarill92 answered 1 year agoRelated Solutions
The chief cost accountant for Kenner Beverage Co. estimated that total factory overhead cost for the...
The chief cost accountant for Kenner Beverage Co. estimated that
total factory overhead cost for the Blending Department for the
coming fiscal year beginning May 1 would be $210,000 and total
direct labor costs would be $150,000. During May, the actual direct
labor cost totaled $12,000 and factory overhead cost incurred
totaled $17,100.
Required:
A.
What is the predetermined factory overhead rate based on direct
labor cost?
B.
On May 31, journalize the entry to apply factory overhead to
production....
The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the...
The cost accountant for River Rock Beverage Co. estimated that
total factory overhead cost for the Blending Department for the
coming fiscal year beginning February 1 would be $130,000, and
total direct labor costs would be $100,000. During February, the
actual direct labor cost totaled $12,500, and factory overhead cost
incurred totaled $16,750.
Required:
a.
What is the predetermined factory overhead rate based on direct
labor cost?
b.
Journalize the entry to apply factory overhead to production
for February 28....
4. The chief cost accountant for Kenner Beverage Co. estimated that total factory overhead cost for...
4. The chief cost accountant for Kenner Beverage Co. estimated
that total factory overhead cost for the Blending Department for
the coming fiscal year beginning May 1 would be $130,000 and total
direct labor costs would be $100,000. During May, the actual direct
labor cost totaled $12,000 and factory overhead cost incurred
totaled $15,950.
Required:
A.
What is the predetermined factory overhead rate based on direct
labor cost?
B.
On May 31, journalize the entry to apply factory overhead to...
Factory Overhead Rate, Entry for Applying Factory Overhead, and Factory Overhead Account Balance The cost accountant...
Factory Overhead Rate, Entry for Applying Factory Overhead, and
Factory Overhead Account Balance
The cost accountant for Kenner Beverage Co. estimated that total
factory overhead cost for the Blending Department for the coming
fiscal year beginning May 1 would be $638,400, and total direct
labor costs would be $532,000. During May, the actual direct labor
cost totaled $46,000, and factory overhead cost incurred totaled
$57,400.
a. What is the predetermined factory overhead
rate based on direct labor cost? Enter your...
Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of...
Factory Overhead Cost Variances
The following data relate to factory overhead cost for the
production of 8,000 computers:
Actual:
Variable factory overhead
$188,200
Fixed factory overhead
61,750
Standard:
8,000 hrs. at $29
232,000
If productive capacity of 100% was 13,000 hours and the total
factory overhead cost budgeted at the level of 8,000 standard hours
was $255,750, determine the variable factory overhead controllable
variance, fixed factory overhead volume variance, and total factory
overhead cost variance. The fixed factory overhead rate...
Factory Overhead Cost Variances The following data relate to factory overhead cost for the production of...
Factory Overhead Cost Variances
The following data relate to factory overhead cost for the
production of 6,000 computers:
Actual:
Variable factory overhead
$229,900
Fixed factory overhead
65,000
Standard:
6,000 hrs. at $46
276,000
If productive capacity of 100% was 10,000 hours and the factory
overhead cost budgeted at the level of 6,000 standard hours was
$302,000, determine the variable factory overhead Controllable
Variance, fixed factory overhead volume variance, and total factory
overhead cost variance. The fixed factory overhead rate was...
Factory Overhead Cost Variance Report Tannin Products Inc. prepared the following factory overhead cost budget for...
Factory Overhead Cost Variance Report
Tannin Products Inc. prepared the following factory overhead
cost budget for the Trim Department for July of the current year,
during which it expected to use 10,000 hours for production:
Variable overhead costs:
Indirect factory labor
$24,000
Power and light
7,500
Indirect materials
17,000
Total variable overhead cost
$ 48,500
Fixed overhead costs:
Supervisory salaries
$43,890
Depreciation of plant and equipment
11,550
Insurance and property taxes
21,560
Total fixed overhead cost
77,000
Total factory overhead...
Factory Overhead Cost Variance Report Tannin Products Inc. prepared the following factory overhead cost budget for...
Factory Overhead Cost Variance Report Tannin Products Inc.
prepared the following factory overhead cost budget for the Trim
Department for July of the current year, during which it expected
to use 18,000 hours for production: Variable overhead cost:
Indirect factory labor $43,200 Power and light 13,500 Indirect
materials 21,600 Total variable overhead cost $ 78,300 Fixed
overhead cost: Supervisory salaries $76,490 Depreciation of plant
and equipment 20,130 Insurance and property taxes 37,580 Total
fixed overhead cost 134,200 Total factory overhead...
Factory Overhead Cost Variance Report Tannin Products Inc. prepared the following factory overhead cost budget for...
Factory Overhead Cost Variance Report
Tannin Products Inc. prepared the following factory overhead
cost budget for the Trim Department for July of the current year,
during which it expected to use 8,000 hours for production:
Variable overhead costs:
Indirect factory labor
$23,200
Power and light
6,000
Indirect materials
12,800
Total variable overhead cost
$42,000
Fixed overhead costs:
Supervisory salaries
$38,990
Depreciation of plant and equipment
10,260
Insurance and property taxes
19,150
Total fixed overhead cost
68,400
Total factory overhead cost...
Factory Overhead Cost Variance Report Tannin Products Inc. prepared the following factory overhead cost budget for...
Factory Overhead Cost Variance Report
Tannin Products Inc. prepared the following factory overhead
cost budget for the Trim Department for July of the current year,
during which it expected to use 8,000 hours for production:
Variable overhead costs:
Indirect factory labor
$24,800
Power and light
6,000
Indirect materials
10,400
Total variable overhead cost
$ 41,200
Fixed overhead costs:
Supervisory salaries
$33,520
Depreciation of plant and equipment
8,820
Insurance and property taxes
16,460
Total fixed overhead cost
58,800
Total factory overhead...
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