Budget resolutions is the answer
Answer:
b. greater under absorption costing than variable costing.
Explanation:
The question is to calculate the closing value of inventory and based on the choices, we need to calculate based on both the Absorption Costing and the Variable Costing Methods.
1. Closing Inventory based on Variable Costing Method
Direct Material $40
Direct Labour $30
Variable Overhead $2
Fixed Overhead <u>$0 </u>(this method does not reecognise fixed cost
Totals (Unit cost of Production) $72
Based on this, the closing inventory is $72 x (8,000+50,000-55,000 units)
=$77 x 3,000= $216,000
2. Closing Inventory based on Absorption Costing Method
Direct Material $40
Direct Labour $30
Variable Overhead $2
Fixed Overhead <u>$5</u>
Totals (Unit cost of Production) $77
Based on this, the closing inventory is $77 x (8,000+50,000-55,000 units)
=$77 x 3,000= $231,000
Based on these calculations:
The Ending Inventory is higher/Greater under absorption costing than variable costing and the reason is that variable costing does not recognize fixed cost in determining the value of ending inventory.
Answer:
Predetermined manufacturing overhead rate= $37.28 per direct labor hour
Explanation:
Giving the following information:
Estimated overhead= 3,700,000 + 960,000= $4,660,000
Estimated direct labor hours= 125,000
<u>To calculate the predetermined manufacturing overhead rate we need to use the following formula:</u>
<u></u>
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 4,660,000/125,000
Predetermined manufacturing overhead rate= $37.28 per direct labor hour
Answer:
Johnson will use the data processing system.
Interactive processing is the simplest way to work on a system. You log in, run commands which execute immediately, and log off when you've finished. You can use either the command line or a graphical environment
