Ch3 Problem 3-53

Ch3 Problem 3-53 - 3-53 (25 MINUTES) 1. Quarter

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Unformatted text preview: 3-53 (25 MINUTES) 1. Quarter 1st.................................................................. 2nd................................................................. 3rd.................................................................. 4th.................................................................. Predetermined Overhead Rate $8 per hour   10 per hour 8 per hour 10 per hour Calculations $400,000/50,000 $320,000/32,000 $200,000/25,000 $280,000/28,000 February $600  340 May $600  340 2. Direct material............................................. Direct labour................................................ Manufacturing overhead: 20 hrs × $8 per hr............................ 20 hrs × $10 per hr.......................... Total cost..................................................... 160 $1,100 200 $1,140 3. 4. February Total cost..................................................... $1,100 Markup (10%)............................................... 110 Price............................................................. $1,210 annual budgeted manufacturing overhead Predetermined rate = annual budgeted direct-labor hours = May $1,140  114 $1,254 $1,200,000 = $8.89 per hour (rounded) 135,000 5. Direct material............................................... Direct labour................................................. Manufacturing overhead (20 hrs × $8.89). Total cost...................................................... 6. February $ 600.00  340.00  177.80 $1,117.80 Total cost...................................................... Markup (10%)................................................ Price............................................................... May $ 600.00  340.00  177.80 $1,117.80 $1,117.80   111.78 $1,229.58 Notice that with quarterly overhead rates, the firm may underprice its product in February and overprice it in May. ...
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This note was uploaded on 02/18/2012 for the course BUSE 237 taught by Professor Sf during the Spring '12 term at Simon Fraser.

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