HW9 - since they arent selling it for enough money, while...

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Jack Meehan Accounting 152 P8-24, P8-23 9/25/2007 Section 11 P8-24 MOH = 6,000,000.00 15000 units of Deluxe Model 1.6 hours of direct labor time per unit 24000 120000 units of regular model 0.8 hours of direct labor time per unit 96000 Total hours 120000 Cost per unit Deluxe Regular MOH per DLH 50 Direct materials $154 $112 Direct labor $16 $8 1. Compute the predetermined overhead rate Calculate unit product cost Unit cost Deluxe Regular Direct material 154 112 Direct labor 16 8 $10/DLH MOH 80 40 $50/DLH Total per unit 250 160 2 Compute the predetermined overhead rates for each of the activities Deluxe Regular Total Overhead Costs /Total /Deluxe # of Purchase orders 400 800 1200 $252,000 $210 $84,000 Number of scrap/rework orders 500 400 900 $648,000 $720 $360,000 Number of tests 6000 9000 15000 $1,350,000 $90 $540,000 Machine-hours 20000 30000 50000 $3,750,000 $75 $1,500,000 3b Unit cost deluxe regular direct material 154 112 direct labor 16 8 MOH 166 29 Total per unit 336 149 4 Factors that are effecting deling profits include that they are probably losing money on every sale of the deluxe model
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Unformatted text preview: since they arent selling it for enough money, while they could be losing sales on the regular one which is priced too high. P8-23 Cleaning carpets travel to jobs job support other Wages 75 15 10 Cleaning supplies 100 Cleaning equipment depreciation 70 30 Vehicle expenses 80 20 Office expenses 60 40 President's compensation 30 70 Costs Wages $140,000 Cleaning Supplies $25,000 Cleaning equipment depreciation $10,000 vehicle expenses $30,000 office expenses $60,000 president's compensation $75,000 Total $340,000 3 Allocating Costs Per activity cost Cleaning Carpets $137,000 13.70 82 Travel to jobs $45,000 0.90 47 Job support $58,500 32.50 33 Other $99,500 N/A 162 Total $340,000 5 I conclude that the company did not profit on this job at all. I would advise the president to price jobs so that they actually make money in the future....
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This homework help was uploaded on 04/07/2008 for the course ACCT 152 taught by Professor Bayak during the Spring '07 term at Lehigh University .

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HW9 - since they arent selling it for enough money, while...

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