I-19.03 Problem

I-19.03 Problem - I-19.03 Canada Quarries processes large...

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I-19.03 Canada Quarries processes large pieces of granite into finely finished countertop material. Production occurs in two phases - sawing and polishing. The sawing phase is almost entirely automated and costs are largely driven by processing time on a computerized sawing machine. Polishing is a labor intensive process, and the amount of time on a particular job varies considerably based on the intrinsic stone quality and the desired sheen for a particular job. The Sawing Department applies factory overhead based on sawing machine hours. The Polishing Department applies factory overhead based on direct labor hours. The following table reveals estimates for the upcoming year. These estimates were used to determine the applicable factory overhead application rates: Sawing Polishing Direct labor 125,000 $ 800,000 $ Direct materials 75,000 $ 6,000 $ Factory overhead 275,000 $ 180,000 $ Direct labor hours 10,000 60,000 Sawing machine hours 50,000 n/a During the year, the company received and processed a granite order for a countertop to be
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

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I-19.03 Problem - I-19.03 Canada Quarries processes large...

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