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1 year ago

Exercise 4-36 (Algo) Application of Overhead [LO 4-4, 4-6]

Business

1 answer:

vesna_86 [32]1 year ago

7 0

1. The predetermined overhead rate is <u>$28 per professional hour</u>.

2. Norton will send Central Texas Bank the total amount of the bill of <u>$472,750</u>.

<h3>What is the predetermined overhead rate?</h3>

The predetermined overhead rate is the quotient of the estimated overhead costs divided by the estimated cost driver units.

The estimated cost driver units are the allocation base for the overhead.

The predetermined overhead rate allocates manufacturing overhead costs to cost objects (product or service units).

<h3>Data and Calculations:</h3>

Estimated overhead costs = $616,000

Estimated professional hours for the year = 22,000

Predetermined overhead rate = $28 ($616,000/22,000)

<h3>Total Billing:</h3>

Direct materials $ 48,000

Direct professional hours ($55/hour) 1,700 = $93,500 (1,700 x $55)

Overhead = $47,600 (2,700 x $28)

Total cost = $189,100

Markup =283,650 ($189,100 x 1.5)

Total billing = $472,750

Thus, the total amount that Norton will send Central Texas bank is <u>$472,750</u>.

Learn more about the predetermined overhead rate at brainly.com/question/26372929

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3 years ago

Read 2 more answers

Roman loves corn bread. He buys corn meal and wheat flour in order to make corn bread. His recipe calls for two cups of corn mea

ale4655 [162]

Answer:

(B) U(c,f)=min{2c,f}

Explanation:

This is an example of Leontif utility function which states that the preferences of a consumer is to a constant ratio of quantities of two or more goods in his demand bundles and having an extra unit of a single good will not increase the utility of the consumer and will make the extra unit to waste. But having more units of all the goods in the demand bundle which maintain the constant ratio will increase the utility of the consumer.

A good example usually used in economics is that of a pair of shoe. Having one right and one left of a type of shoe gives a consumer utility at a constant ratio of 1:1, and increasing each leg by multiple of one at every point in time will increase the utility of the consumer, while increasing just only one makes the utility not to change. For instance, having only two left shoe will not give the consumer any utility and make both the left shoe useless.

In the question, the ratio of cups of corn meal, denoted by c, and cups of flour, denoted by f, is 2:1. This implies that to increase the utility of the consumer, c has to increase by a multiple of 2 at every point in time while f has to increase by one at the same point in time to maintain the constant ratio of 2:1. Increasing only c by 2 or only f by 1 will maintain the constant ratio and it will lead to a waste of the increased unit of the affected commodity.

Therefore, option (B) U(c,f)=min{2c,f} is the correct answer that gives a constant ratio of 2:1 = 2c:f.

I wish you the best.

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3 years ago

Consider the following information: State Probability Stock A Stock B Stock C Boom 0.32 -0.01 0.23 0.2 Bust 0.68 0.21 -0.06 -0.0

gregori [183]

Answer:

the expected return of a portfolio that has invested is 0.0625

Explanation:

The computation of the expected return of a portfolio is shown below;

= (0.32 × (6052 × (-0.01) + 5060 × 0.23 + 8047 × 0.2) + 0.68 × (6052 × 0.21 + 5060 × (-0.06) + 8047 × (-0.06))) ÷ (6052 + 5060 + 8047)

= 0.0625041808027559

= 0.0625

Hence, the expected return of a portfolio that has invested is 0.0625

Therefore the same should be considered and relevant

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3 years ago

Exercise 10-7 Direct Materials Variances [LO10-1] Huron Company produces a commercial cleaning compound known as Zoom. The direc

Musya8 [376]

Answer:

Direct Material Price Variance = $1,100 Favorable

Direct Material Quantity Variance = - $9,075 Unfavorable

Explanation:

Direct Material Price Variance = (Standard Price - Actual Price) X Actual Quantity

Provided Standard Price = $2.50

Actual Price = $2.40

Actual Quantity = 11,000 pounds

Direct Material Price Variance = ($2.5 - $2.4) X 11,000 pounds

= $1,100 Favorable

This is favorable because actual price is less than Standard Price.

Direct Material Quantity Variance = (Standard Quantity - Actual Quantity) X Standard Price

Standard Quantity for Actual Output = 1,100 X 5.70 pounds per unit = 6,270 pounds

Actual Quantity used = 9,900 pounds

Standard Price = $2.50

Direct Material Quantity Variance = (6,270 - 9,900) X $2.5

= - $9,075 Unfavorable

This is unfavorable because as per standard norms only 6,270 pounds of raw material was needed to produce 1,100 units of Zoom.

Final Answer

Direct Material Price Variance = $1,100 Favorable

Direct Material Quantity Variance = - $9,075 Unfavorable

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Baxter Bakers is trying to decide whether it should keep its existing bread-making machine or purchase a new one that has techno

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Based on the type of cost that the original cost of the machine is, we can say that it represents a sunk cost.

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The original cost of the existing machine of $10,000, is a sunk cost because the company has already incurred it and cannot recover it.

Find out more on sunk costs at brainly.com/question/24976252.

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2 years ago