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Gekata [30.6K]
3 years ago
15

Our company makes sophisticated lenses for satellite cameras. We allocated our overhead (OH) costs using practical equipment mac

hine hours (MHs).
For 2019, we estimated:

the cost of excess capacity of $760,000;
practical MHs of 25,000;
and estimated MHs used of 20,000.

We are considering switching to using "textbook" absorption costing to allocate our OH costs using estimated MHs. If we made the switch, our OH rate would be closest to:
Business
1 answer:
ser-zykov [4K]3 years ago
5 0

Answer:

If we made the switch, our OH rate would be closest to: $30.40 per MH

Explanation:

Overhead Rate is used to allocate manufacturing overheads (indirect costs) to jobs and departments.

In our senario Overhead rate are used to allocate fixed manufacturing overheads to production of lenses for satellite cameras.

Overhead Rate = Budgeted Overheads / Budgeted Activity

                          = $760,000/ 25,000

                          = $30.40 per practical equipment machine hour

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ansure safe and healthful working conditions for workers by setting and enforcing standards and by providing training, outreach, education and assistance.

Explanation:

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8 0
2 years ago
Knight Company reports the following costs and expenses in May. Factory utilities $16,120 Direct labor $69,685 Depreciation on f
GarryVolchara [31]

Answer:

a. $180,850

b. $390,269

c. $74,837

Explanation:

a. The computation of the manufacturing overhead is shown below:

= Factory utilities  + Depreciation on factory equipment + Property taxes on factory building  + Indirect factory labor  + Indirect materials + Factory repairs+ Factory manager salary

=  $16,120  + $13,703 + $2,894 + $52,814 + $83,926 + $3,044  + $8,349

= $180,850

b. The computation of the product cost is shown below:

= Direct materials used + Direct labor +  manufacturing overhead

= $139,734 + $69,685 + $180,850

= $390,269

c. The computation of the period cost is shown below:

= Sales salaries + Depreciation on delivery trucks + Repairs to office equipment +  Advertising + Office supplies used

= $49,631 + $4,044 + $2,185 + $15,670 + $3,307

= $74,837

7 0
2 years ago
Which of the following is true? Overhead costs are often affected by many issues and are frequently too complex to be explained
11111nata11111 [884]

Answer:

Overhead costs are often affected by many issues and are frequently too complex to be explained by any one factor.

Explanation:

An overhead cost is not directly defined, to be that of material, or labor, or any other unit, overhead include, many factors, electricity usage, machine hours usage, water usage, or the capacity utilization of machinery, and various other factors. Since its computation and allocation is not clear many a times, a single overhead like that of electricity, has many factors, ideal usage of electricity, or machine hours used in production or simply the total cost of overheads for that month or building or etc: and its utilization. In short, to conclude we can state that overhead costs are complex in nature.

All other options are false.

Final Answer

Overhead costs are often affected by many issues and are frequently too complex to be explained by any one factor.

8 0
2 years ago
Beckenworth had cost of goods sold of $11,221 million, ending inventory of $3,889 million, and average inventory of $2,145 milli
inysia [295]

Answer:

69.77 days

Explanation:

days' sales in inventory = number of days in a period/ inventory turnover

inventory turnover = Cost of goods sold / average inventory

Inventory turnover = $11,221 / $2,145 = 5.231235

days' sales in inventory = = 365 / 5.231235 million = 69.77 days

3 0
3 years ago
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