ACCT case assignment

ACCT case assignment - step of the process take more people...

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ACCT204-200 M. McCourt Case Assignment 3-33 Page 146 1. Predetermined overhead = estimated manufacturing overhead . estimated quantity of the allocation base = 2,475,000 46,000 = $53.80 per direct labor hour The new predetermined overhead is higher than the first estimate since there was a reduction in direct labor hours (denominator,) and therefore this would force an increase in the predetermined overhead rate since less people are now assigned to do the same amount of work that more people once did. 2. This new rate would make the cost of all jobs become more expensive since the total amount of dollars per direct labor house has increased throughout the entire company. 3. Managers would be concerned about the new overhead rate because job that once took less money per direct labor hour are now costing the company more. The processes that were once done by many hands are now being done by less people therefore having each
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Unformatted text preview: step of the process take more people more time to accomplish to make up for the missing workers. This could then lead to a decrease in production and increase in cost for the products. 4. Predetermined overhead = estimated manufacturing overhead . estimated quantity of the allocation base = 2,475,000 50,000 = $49.50 per direct labor hour By only reducing labor by 2,000 1 worker instead of 6,000 the change in expense of the dollars per direct labor hour would be better for the company and cost them less money per direct labor hour. However, it still appears that the predetermined overhead after the installment of the new machines is still going to rise from the previous $47.60 per direct labor hour cost that was obtained before the installment of the new machines....
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This note was uploaded on 04/07/2008 for the course ACCT 200 taught by Professor Williams during the Fall '07 term at Marist.

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