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Chapter 3 Presentation Solutions - 2009

# Chapter 3 Presentation Solutions - 2009 - BriefExercise32 1...

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Chapter 3 Presentation Solutions Brief Exercise 3-2 1. The activity rates are computed as follows: Activity Cost Pool (a) Estimated Overhead Cost (b) Expected Activity (a) ÷ (b) Activity Rate Labor related. ............................ \$ 52,000 8,000 DLHs \$ 6.50 per DLH Machine related. ....................... 15,000 20,000 MHs 0.75 per MH Machine setups. ........................ 42,000 1,000 setups 42.00 per setup Production orders. .................... 18,000 500 orders 36.00 per order Product testing. ......................... 48,000 2,000 tests 24.00 per test Packaging. ................................ 75,000 5,000 packages 15.00 per package General factory. ........................   108,800     8,000 DLHs 13.60 per DLH Total. ......................................... \$358,800 2. The predetermined overhead rate based entirely on direct labor-hours would be computed as follows: Total estimated overhead cost (a). ...................... \$358,800 Total expected direct labor-hours (b). ..................           8,000     DLHs Predetermined overhead rate (a) ÷ (b). ............... \$          44.85     per DLH ACC 208 – Presentation Solutions Chapter #3 1

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Brief Exercise 3-3 The unit product costs for the products are a combination of direct materials, direct labor, and overhead costs. The  overhead costs assigned to each product would be computed as follows: J78 B52  Expected Activity  Amount Expected Activity Amount Labor related, at \$7.00 per direct labor-hour. .................... 1,000 \$ 7,000 40 \$ 280 Machine related, at \$3.00 per machine-hour. .................... 3,200 9,600 30 90 Machine setups, at \$40.00 per setup. ................................ 5 200 1 40 Production orders, at \$160.00 per order. ........................... 5 800 1 160 Shipments, at \$120.00 per shipment. ................................ 10 1,200 1 120 General factory, at \$4.00 per direct labor-hour. ................. 1,000       4,000     40     160     Total overhead cost assigned (a). ..................................... \$22,800 \$ 850 Number of units produced (b). ...........................................       4,000         100     Overhead cost per unit (a) ÷ (b). ........................................ \$          5.70     \$8.50 The unit product costs combine direct materials, direct labor, and overhead costs as follows: J78 B52 Direct materials. .......................................................... \$ 6.50 \$31.00 Direct labor. ................................................................. 3.75 6.00 Manufacturing overhead (see above). ........................       5.70           8.50     Unit product cost. ........................................................ \$15.95 \$45.50 ACC 208 – Presentation Solutions Chapter #3 2
Brief Exercise 3-4 1. Using the company's conventional costing system, the overhead costs applied to the products would be computed as

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Chapter 3 Presentation Solutions - 2009 - BriefExercise32 1...

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