ACCTG 231 Chapter Notes - Chapter 3: Purchase Order
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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:
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| ||
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 |
