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melamori03 [73]
3 years ago
6

The Mega Construction Company recently switched to activity-based costing (ABC) from the department allocation method. The depar

tment method allocated overhead costs at a rate of $60 per machine hour. The cost accountant for the Finishing Department has gathered the following data: Activity Cost Drivers Amount Material handling Tons of material handled $ 80 Machine setups Number of production runs 4,000 Utilities Machine hours 15 Quality control Number of inspections 600 During April, Mega purchased and used $115,000 of direct materials at $20 per ton. There were 8 production runs using a total of 11,000 machine hours in April. The manager of the Finishing Department needed 12 inspections. Actual overhead costs totaled $890,000 for the month. How much overhead costs were applied to the Work-in-Process Inventory during April using activity-based costing
Business
1 answer:
Anuta_ua [19.1K]3 years ago
5 0

Answer:

$664,200

Explanation:

Computation of the given data are as follow:-

Material Overhead = (Machine purchase price ÷ Direct material per ton) × Cost of material handling

= (115,000 ÷ 20) × 80

= $460,000  

Set up of Machine = Production overhead =No. of production run × cost of production run

= 8 × $4,000 = $32,000

Quality Control = 12 × $600 = $7,200

Utilities Cost = 11,000 × $15 = $165,000

Work In Process Inventory During April = Material Overhead + Production Overhead + Quality Control +  Utilities Cost

= $460,000 + $32,000 + $7,200 + $165,000

=$664,200

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vivado [14]

Answer:

False.

Explanation:

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Therefore, <u>it is not true that rejecting a job on the spot during an interview is a standard procedure.</u>

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3 years ago
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sineoko [7]

The amount of the bad debts expense adjusting entry is:$7665.

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5 0
2 years ago
1-a. Prepare a contribution format income statement for the game last year. 1-b. Compute the degree of operating leverage. 2. Ma
marishachu [46]

Answer:

1-a. Total Contribution margin is $210,000 and Net operating income is $28,000.

1-b. Degree of Operating Leverage = 7.50

2-a. The expected percentage increase in net operating income for next year is 150%.

2-b. Expected amount of Net Operating Income is $70,000.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Magic Realm, Inc., has developed a new fantasy board game. The company sold 15,000 games last year at a selling price of $20 per game. Fixed costs associated with the game total $182,000 per year, and variable costs are $6 per game. Production of the game is entrusted to a printing contractor. Variable costs consist mostly of payments to this contractor.

Required:

1-a. Prepare a contribution format income statement for the game last year.

1-b. Compute the degree of operating leverage.

2. Management is confident that the company can sell 18,000 games next year (an increase of 3,000 games, or 20%, over last year). Given this assumption:

a. What is the expected percentage increase in net operating income for next year?

b. What is the expected amount of net operating income for next year? (Do not prepare an income statement; use the degree of operating leverage to compute your answer.)

Explanation of the answer is now provided as follows:

1-a. Prepare a contribution format income statement for the game last year.

The contribution format income statement for the game last year can be prepared as follows:

Magic Realm, Inc.

Contribution Income Statement

For Last Year

<u>Details                               Total ($)       Per Unit ($)   </u>

Sales                                 300,000              20

Variable cost                <u>    (90,000)   </u>          <u>  (6) </u>

Contribution margin         210,000               14

Fixed expense                <u> (182,000) </u>

Net operating income   <u>   28,000  </u>

1-b. Compute the degree of operating leverage.

Degree of Operating Leverage = Contribution Margin / Operating Income = $210,000 / $28,000 = 7.50

2-a. Management is confident that the company can sell 18,000 games next year (an increase of 3,000 games, or 20%, over last year). Given this assumption: What is the expected percentage increase in net operating income for next year?

Since:

Degree of Operating Leverage = Percentage change in Operating Income / Percentage change in Sales

Substituting the relevant values, we have:

7.50 =  Percentage change in Operating Income / 20%

Percentage change in Operating Income = 7.5 * 20% = 150%

Therefore, the expected percentage increase in net operating income for next year is 150%.

2-b. Management is confident that the company can sell 18,000 games next year (an increase of 3,000 games, or 20%, over last year). Given this assumption: What is the expected amount of net operating income for next year? (Do not prepare an income statement; use the degree of operating leverage to compute your answer.)

This can be calculated as follows:

Change in Net Operating Income = 150% * $28,000 = $42,000

Expected amount of Net Operating Income = Current Net Operating Income + Change in Net Operating Income = $28,000 + $42,000 = $70,000

6 0
3 years ago
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Simora [160]

Answer:

Mary can deduct $1,300 in year 1 for her points paid.

Explanation:

a) Data and Calculations:

April 1, Amount borrowed by Mary to refinance the original mortgage on her principal residence = $130,000

Payment of 1 points to reduce Mary's interest rate from 7% to 6% amounts to 1% of $130,000 = $1,300.

b) Mary paying 1 points is beneficial to her since her interest cost is reduced from 7% to 6%.  This implies that her total finance cost at the end of the 30-year period will be reduced.

4 0
2 years ago
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