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Week 5 Class Exercise

# Week 5 Class Exercise - 180 150 120 80 Number of 24 19...

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Week 5 Class Exercises 1. Robert Company’s power plant provides electricity for its two producing departments, A and B. The budget for the power plant shows the following: Budgeted fixed costs \$500,000 Budgeted variable costs per kilowatt hour \$1 Additional data are as follows: Dept. Y Dept. Z Long-run capacity available * 350,000 200,000 Budgeted * 300,000 190,000 Actual * 270,000 165,000 *in kilowatt hours Actual power plant costs were \$215,000 fixed and \$350,000 variable. Required: a. Compute the amount of fixed costs allocated to each department. b. Compute the amount of variable costs allocated to each department.

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2. Cougar Company has two service departments, Maintenance and Cafeteria, as well as two production departments, Mixing and Finishing. Maintenance Department costs are allocated based on direct-labor hours and Cafeteria Department costs are allocated based on number of employees. The following information is also available: Maintenance Cafeteria Mixing Finishing Direct dept. costs \$7,000 \$2,800 \$1,200 \$400 Direct-labor hours
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Unformatted text preview: 180 150 120 80 Number of employees 36 30 24 19 Required: Assuming the step-down method of allocating costs and the Maintenance Department renders the greatest service, determine the amount of each service department's costs that will be allocated to each production department. 3. Jones Corp. uses a budgeted factory-overhead rate to apply overhead to production. The following data are available for the year: Budgeted factory overhead \$675,000 Actual factory overhead \$726,000 Budgeted direct-labor costs \$450,000 Actual direct-labor costs \$482,000 End of year balances are as follows: Materials inventory \$120,000 WIP inventory \$100,000 Cost of goods sold \$150,000 Finished goods inventory \$250,000 Required: a. Determine the budgeted factory-overhead rate based on direct-labor costs. b. What is the applied overhead based on direct-labor costs? c. What is the overhead variance? d. Prorate the overhead variance to the appropriate accounts....
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Week 5 Class Exercise - 180 150 120 80 Number of 24 19...

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