Week 12 Problems.docx

Week 12 Problems.docx - P 9-2 Allington Screen Plant Total...

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P 9-2: Allington Screen Plant Total utilized overhead= Sum of overheads = Over absorbed overhead+ Actual overhead = 797759+ 4287482 = $5085241 Budgeted fixed overhead (estimated) = $3594240. Difference in budget= 5085241- 3594240 = $ 1491001 Budgeted volume amount= 1491001/0.01=149100100 Therefore the budgeted volume is greater than the actual volume. P10-1: Federal Mixing Variable costing writes off to income all fixed manufacturing costs uncured during the year . Absorption costing prorates the fixed overheads between units in inventory and units sold based on machine hours. Absorption costing net income is higher than under variable costing by $1.2 million. This means that inventories under absorption costing are higher by $1.2 million The ending work-in-process inventory contains 20,000 more machine hours than the beginning inventory (90,000 – 70,000 machine hours). From the data given, the fixed overhead rate applied To products is $60 per machine hour Or, $1.2 million = (90,000 – 70,000) x fixed overhead rate Fixed Overhead rate = $1,200,000 20,000 = $60
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P 10-10 Medford Mug Company a The Operating profit for 2016 is given below
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