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Burka [1]
3 years ago
14

At the beginning of 2013, Barcroft Co. estimated that its total annual fixed overhead costs would amount to $25,000. Further, Ba

rcroft estimated that its volume of production would be 2,000 units of product. Based on these estimates, Barcroft computed a predetermined overhead rate that was used to allocate overhead costs to the products made in 2013. As predicted, actual fixed overhead costs did amount to $25,000. However, actual volume of production amounted to 2,200 units of product. Based on this information alone: 
a. Products were costed accurately in 2013.

b. Products were overcosted in 2013.

c. Products were undercosted in 2013.

d.The answer cannot be determined from the information provided
Business
1 answer:
Varvara68 [4.7K]3 years ago
3 0

Answer:

b. Products were overcosted in 2013

Explanation:

When determining the cost of a product, we consider only the Overheads Applied.

<u>Applied Overheads are calculated as :</u>

Pre-determined Overhead Rate <em>multiplied by </em>Actual Activity

<u>Predetermined Overhead Rate is calculated as follows :</u>

Budgeted Overheads <em>divided by</em> Budgeted Activity

Predetermined Overhead Rate = $25,000/2,000 units

                                                     = $ 12.50 per unit

Applied Overheads = $ 12.50 per unit × 2,200 units

                                 =  $ 27,500

The Overheads Applied are then <em>Compared to</em> Actual Overhead Cost to determine is the Overheads where Over or Under Applied

<u>Therefore our case presents the following:</u>

Applied Overheads ($ 27,500) >Actual Overheads ($25,000)

Therefore, we have an Over-Application situation.

Over-Applied Overheads are $2,500

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Step one :

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3 years ago
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Suppose that a lumberyard has a supply of 10-ft boards, which are cut into 3-ft, 4-ft, and 5-ft boards according to customer dem
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Answer :

Some answers are attached below

Explanation:

a) Based on the information provided, below are the all possible sensible patterns the lumberyard may use to cut the 10-ft boards -

Pattern Number 3-ft boards 4-ft boards 5-ft boards Waste (<3-ft)

1                      3                   0                     0                       1                                                                        

2                                2                 1                          0                      0

3                             1                    0                           1                       2            

4                                 0                     1                          1                        1

5                           0                      2                           0                       2                  

6                      0                     0                            2                     0      

b) ILP Formulation

Objective Function

Minimize Number of 10 ft-boards to be cut

Z = x1+x2+x3+x4+x5+x6 where xi is the number of boards for pattern i

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x2+x4+2x5>=60 ----->4-ft boards

x3+x4+2x6>=60 ----->5-ft boards

Xi>=0 ---->Non-negativity constraint

Below is the excel solver formulation and solution -

The optimal number of Pattern 1,5,6 =0, Pattern 2,3 and 4 = 30

The minimum number of 10 ft-boards to be cut = 90

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