Stewart Marketing Inc. manufactures two products, A andB. Presently, the company uses a single plant-wide factory overheadrate for allocating overhead to products. However, management isconsidering moving to a multiple department rate system forallocating overhead. From the following information, determine theoverhead from both production departments allocated to each unit ofProduct B if the company uses a multiple department ratesystem.
Overhead
Direct Labor
Hours (dlh)
Product A B Painting Dept. $248,000 10,000 dlh 16 dlh 4 dlh Finishing Dept. 72,000 10,000 4 16 Totals $320,000 20,000 dlh 20 dlh 20 dlh ======== ========== ====== ======
$214.40 per unit
$99.20 per unit
$320.00 per unit
$425.60 per unit
Phelan Systems Corporation is estimating activity costsassociated with producing disk drives, tapes drives, and wiredrives. The indirect labor can be traced to four separate activitypools. The budgeted activity cost and activity base information,along with the estimated activity-base information, is providedbelow.
Activity
Cost
Activity Base Procurement $ 360,000 Number of purchase orders Scheduling 240,000 Number of production orders Materials handling 480,000 Number of moves Product development 720,000 Number of engineering changes Production 1,420,000 Machine hours
Number of
Purchase
Orders Number
of
Production
Orders
Number
of
Moves
Number of Engineering
Changes
Machine
Hours
Number
of
Units Disk drives 4,000 300 1,400 10 2,000 2,000 Tape drives 2,000 150 600 5 8,000 4,000 Wire drives 12,000 800 4,000 25 10,000 2,500
Determine the activity rate for product development perchange.
$28,000
$72,000
$18,000
$36,000
Stewart Marketing Inc. manufactures two products, A andB. Presently, the company uses a single plant-wide factory overheadrate for allocating overhead to products. However, management isconsidering moving to a multiple department rate system forallocating overhead. From the following information, determine theoverhead from both production departments allocated to each unit ofProduct B if the company uses a multiple department ratesystem.
| Overhead | Direct Labor Hours (dlh) | Product | ||
| A | B | |||
| Painting Dept. | $248,000 | 10,000 dlh | 16 dlh | 4 dlh |
| Finishing Dept. | 72,000 | 10,000 | 4 | 16 |
| Totals | $320,000 | 20,000 dlh | 20 dlh | 20 dlh |
| ======== | ========== | ====== | ====== | |
| $214.40 per unit |
| $99.20 per unit |
| $320.00 per unit |
| $425.60 per unit |
Phelan Systems Corporation is estimating activity costsassociated with producing disk drives, tapes drives, and wiredrives. The indirect labor can be traced to four separate activitypools. The budgeted activity cost and activity base information,along with the estimated activity-base information, is providedbelow.
| Activity Cost | Activity Base | ||||||||
| Procurement | $ 360,000 | Number of purchase orders | |||||||
| Scheduling | 240,000 | Number of production orders | |||||||
| Materials handling | 480,000 | Number of moves | |||||||
| Product development | 720,000 | Number of engineering changes | |||||||
| Production | 1,420,000 | Machine hours | |||||||
| Number of Purchase Orders | Number of Production Orders | Number of Moves | Number of Engineering Changes | Machine Hours | Number of Units | ||||
| Disk drives | 4,000 | 300 | 1,400 | 10 | 2,000 | 2,000 | |||
| Tape drives | 2,000 | 150 | 600 | 5 | 8,000 | 4,000 | |||
| Wire drives | 12,000 | 800 | 4,000 | 25 | 10,000 | 2,500 | |||
Determine the activity rate for product development perchange.
| $28,000 |
| $72,000 |
| $18,000 |
| $36,000 |
Related questions
Stewart Marketing Inc. manufactures two products, A andB. Presently, the company uses a single plant-wide factory overheadrate for allocating overhead to products. However, management isconsidering moving to a multiple department rate system forallocating overhead. From the following information, using a singleplant-wide rate, determine the overhead rate per unit for ProductA:
|
|
| ||
A | B | |||
| Painting Dept. | $248,000 | 10,000 dlh | 16 dlh | 4 dlh |
| Finishing Dept. | 72,000 | 10,000 | 4 | 16 |
| Totals | $320,000 | 20,000 dlh | 20 dlh | 20 dlh |
======== | ========== | ====== | ====== | |
| $496.00 per unit |
| $320.00 per unit |
| $144.00 per unit |
| $640.00 per unit |
Stewart Marketing Inc. manufactures two products, A andB. Presently, the company uses a single plant-wide factory overheadrate for allocating overhead to products. However, management isconsidering moving to a multiple department rate system forallocating overhead. From the following information, using a singleplant-wide rate, determine the overhead rate per unit for ProductB:
| Overhead | Direct Labor Hours (dlh) | Product | ||
| A | B | |||
| Painting Dept. | $248,000 | 10,000 dlh | 16 dlh | 4 dlh |
| Finishing Dept. | 72,000 | 10,000 | 4 | 16 |
| Totals | $320,000 | 20,000 dlh | 20 dlh | 20 dlh |
| ======== | ========== | ====== | ====== | |
| $320.00 |
| $496.00 |
| $144.00 |
| $640.00 |
The single plantwide factory overhead rate is $52 perdirect labor hour. The company implements activity-based costingusing four different activity bases, including direct labor hours(and three others). What can be said about the direct labor rateunder activity-based costing relative to the single plantwiderate?
| The direct labor rate under activity-based costing will beequal to $52 per direct labor hour. |
| The direct labor rate under activity-based costing cannot becompared meaningfully to the $52 per direct labor hour rate. |
| The direct labor rate under activity-based costing must be lessthan $52 per direct labor hour. |
| The direct labor rate under activity-based costing must begreater than $52 per direct labor hour. |
The Nite Lite Factory produces two products - smalllamps and desk lamps. It has two separate departments - finishingand production. The overhead budget for the finishing department is$550,000, using 500,000 direct labor hours. The overhead budget forthe production department is $400,000 using 80,000 direct laborhours. If the budget estimates that a desk lamp will require 1hours of finishing and 2 hours of production, how much factoryoverhead will be allocated to each unit of desk lamps using themultiple production department factory overhead rate method with anallocation base of direct labor hours?
| $11.10 |
| $10.00 |
| $4.91 |
| $5.00 |
The Delph Company produces two products, Blinks andDinks. They are manufactured in two departments, Fabrication andassembly. Data for the products and departments are listedbelow.
| Product | Number of units | Labor hrs per unit | Machine hours per unit |
| Blinks | 1,000 | 4 | 5 |
| Dinks | 2,000 | 2 | 8 |
All of the Machine hours take place in the Fabricationdepartment, which has an estimated overhead of $84,000. All of thelabor hours take place in the Assembly department, which has anestimated total overhead of $72,000.
The Delph Company usesa departmental overheadrates. The fabrication department uses machinehours for an allocation base, and the assembly department useslabor hours. What is the overhead cost per unit forDinks?
| $64 |
| $44 |
| $56 |
| $50 |
