Managerial Accounting- Assighnment 3.docx - Managerial Accounting Assignment 3 Name Samantha Nicastro Professor Michael Lindsay Course Code BAB240 Date

Managerial Accounting- Assighnment 3.docx - Managerial...

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Managerial Accounting: Assignment 3 Name: Samantha Nicastro Professor: Michael Lindsay Course Code: BAB240 Date: Wednesday August 8, 2018 Problem 1
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Twizzle Manufacturing is a small manufacturer that uses machine-hours as its activity base for assigning overhead costs to jobs. The company estimated the following amounts for 2012 for the company and for Job 62: Company Job 62 Direct materials $60,000 $4,000 Direct labour $25,000 $2,500 Manufacturing overhead costs $72,000 Machine hours 90,000 mh 1,350 mh During 2012, the actual machine-hours totaled 94,000, and actual overhead costs were $71,000. a. How much is the predetermined overhead rate? 2 Marks Total overhead/direct labour= predetermined overhead rate 25,000/ 72,000= 0.35 b. How much are total manufacturing costs of job 62? 4 Marks 60,000+25,000+72,000= 157,000 c. How much overhead is over or under-applied for the year for the company? State amount and whether it’s over or under. 4 Marks 72,000/90,000=0.8 72,000/1,350=53.3 0.8-53.3= 45.3 It is under
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Problem 2 Evans Recycle plans to produce 1,500 recycle bins during April. Each bin requires 1.7 kilograms of plastic and 0.1 hours of direct labour. Plastic costs $2.15 per kilogram. Evans pays its employees $12.50 per hour. Manufacturing overhead is applied at a rate of 150% of direct labour costs. Finished plastic lids are purchased separately from another supplier. Evans has 400 kilograms of plastic in beginning inventory and wants to have 550 kilograms in ending inventory. Instructions: a. How many kilograms of plastic direct materials should Evans plan to buy during April? Units to be produced $1,500 Kilograms per bin 1.7kg Total needed kilograms for production (1,500x1.7) $2,550 Add: expected ending inventory 550kg Subtract: beginning inventory -400kg Purchases of plastic needed in kg 2,700 Therefore, even should plan to buy 2,700 of plastic b. How much should Evans budget for direct labour for April? Units to be produced $1,500 Labour per unit 0.1h Hours required(1,500x0.1) 150h Cost per hour $12.50 Total labour budgeted(150x12.50) $1,875 Therefore, Evans should budget for $1,875 in direct labour for april.
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