1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
emmasim [6.3K]
3 years ago
6

Donovan's Fine Furnishings manufactures upscale custom furniture. Donovan's currently uses a plantwide overhead rate based on di

rect labor hours to allocate its $1,290,000 of manufacturing overhead to individual jobs.​ However, Donna Cermak​, owner and​CEO, is considering refining the​ company's costing system by using departmental overhead rates.​ Currently, the Machining Department incurs $870,000 of manufacturing overhead while the Finishing Department incurs $420,000 of manufacturing overhead. Donna has identified machine hours​ (MH) as the primary manufacturing overhead cost driver in the Machining Department and direct labor​(DL) hours as the primary cost driver in the Finishing Department.
The Donovan's plant completed Jobs 450 and 455 on May 15. Both jobs incurred a total of 66 DL hours throughout the entire production process. Job 450 incurred 11 MH in the Machining Department and 55 DL hours in the Finishing Department​ (the other DL hour occurred in the Machining​Department). Job 455 incurred 44 MH in the Machining Department and 44 DL hours in the Finishing Department​ (the other two DL hours occurred in the Machining​Department).
Requirement 1. Compute the plantwide overhead rate assuming that Donovan's expects to incur 30,000 total DL hours during the year. First identify the​ formula, then compute the rate. ​(Round your answer to the nearest whole​ dollar.)
/
=
Plantwide overhead rate
/
=
Requirement 2. Compute departmental overhead rates assuming that Donovan's
expects to incur 14,500 MH in the Machining Department and 17,500 DL hours in the Finishing Department during the year. First identify the​ formula, then compute the rate for each department.​(Round your answers to the nearest whole​dollar.)
Departmental
/
=
overhead rate
Machining
/
=
per mach. hour
Finishing
/
=
per DL hour
Requirement 3. If Donovan's continues to use the plantwide overhead​ rate, how much manufacturing overhead would be allocated to Job 450 and Job​ 455? First identify the​ formula, then calculate the amount of manufacturing overhead that would be allocated to the jobs if the plantwide overhead rate is used.​(Round your answers to the nearest whole​ dollar.)
Manufacturing overhead
x
=
allocated
Job 450
x
=
Job 455
x
=
Requirement 4. If Donovan's uses departmental overhead​ rates, how much manufacturing overhead would be allocated to Job 450 and Job​ 455? Use the following table to calculate the amount of manufacturing overhead that would be allocated to the jobs if the departmental overhead rates are used. ​(Round your answers to the nearest whole​ dollar.)
Job 450
Job 455
Machining
Finishing
Total overhead allocation
Requirement 5. Based on your answers to Requirements 3 and​ 4, does the plantwide overhead rate overcost or undercost either​ job? Explain. If Donovan's sells its furniture at​ 125% of​ cost, will its choice of allocation systems affect product​ pricing? Explain.
The single plantwide rate (overcosts/undercosts) Job 450 by $ __ and (overcosts/undercosts) Job 455 by $ ___.
Since Donovan's sets its sales price at​ 125% of​ cost, and the job cost is (affected/unaffected) by th eallocation system it uses, it sales price will (be affected/will not be affected) by the allocation system it uses.
Business
1 answer:
nadezda [96]3 years ago
3 0

Answer and Explanation:

1. The plant-wide overhead rate is:-

Plant-wide overhead rate = Total manufacturing overhead ÷ Cost allocation base

= $1,290,000 ÷ 30,000

= $43

2. The departmental overhead rates is

For machining = Total departmental overhead ÷ Cost allocation bases

= $870,000 ÷ 14,500

= $60

For finishing = Total departmental overhead ÷ Cost allocation bases

= $420,000 ÷ 17,500

= $24

3. The manufacturing overhead is

For Job 450 = Plantwide overhead rate × Actual use of allocation base

= $43 × 66

= $2,838

For Job 455 = Plantwide overhead rate × Actual use of allocation base

= $43 × 66

= $2,838

4. The amount of manufacturing overhead is

For Job 450 = Machining + Finishing

= (60 × 11) + (24 × 55)

= $660 + $1,320

= $1,980

For Job 455 = Machining + Finishing

= (60 × 44) + (24 × 44)

= $2,640 + $1,056

= $3,696

5. The single plant-wide rate overcost Job 450 by ($2,838 - $1,980) $858 and under-costs Job 455 by ($2,838 - $3,696) $858

Therefore the job cost is affected and sales price would be unaffected

You might be interested in
Which of the following statements about the importance of each competitive factors (but especially such highly influential facto
Luda [366]

Question Completion:

O Tiny cross-company differences on a highly influential competitive factor (like selling prices, or S/Q ratings or models/styles) nearly always have a bigger impact on company sales/market shares in a region than do large company-to-company differences on less influential competitive factors.

O While it is true that some competitive factors affect the brand choices of buyers more than others, what matters most in determining sales and market shares is competitive effort and the regional average on each competitive factor

O How much differences in the number of models/styles that companies have in their product lines matter in determining each company's unit sales/market share in a region is not a fixed amount but rather is an amount that varies from *big (when model/style differences are also "big") to "small  

O In the rare instance that all companies in a region should happen to offer buyers the very same number of differences are "small") to "zero" (when the models/styles offered by rivals are identical). models/styles, then models/styles become a total competitive non-factor and have zero impact on buyer appeal for one brand versus another-in such cases, 100% of the regional sales and market share differences among company rivals stem directly from differences on the other 12 competitive factors.

O Big company-to-company differences in the number of models/styles offered to buyers in a region weigh heavily in accounting for company-to-company differences in branded pairs sold and market share in all four geographic regions.

Answer:

The statements about the importance of each competitive factors (but especially such highly influential factors as selling prices, S/Q ratings, and number of models/styles offered) in determining company sales volumes and market shares in a particular geographic region which is false is:

O Tiny cross-company differences on a highly influential competitive factor (like selling prices, or S/Q ratings or models/styles) nearly always have a bigger impact on company sales/market shares in a region than do large company-to-company differences on less influential competitive factors.

Explanation:

This implies that the following factors drive company sales volumes and market shares in a particular geographic region: competitive effort, differences in the number of models/styles that companies have in their product lines, big company-to-company differences in the number of models/styles offered to buyers in a region, among the other 12 competitive factors.

4 0
3 years ago
Omnimenium, an automobile company, incurred a debt of $20 million for the fiscal year of 2016. The company used that money with
Mrrafil [7]

Answer:

<u>Leverage Ratios</u>

Explanation:

Leverage ratios signify the proportion of debt. The purpose behind calculating such ratios and their interpretation being to assess an entity's reliance on debt for raising long term capital.

Debt to investments ratio would be the proportion of debt used in the total investment made by a company.

Debt to investments ratio is computed as : \frac{Amount\ of \ debt\ used}{Total\ investments }

In the given case, the company utilized it's funds from debt to the tune of $20 million for it's investments in buying out another company.

Total investments = $ 20 million in debt + $20 million own funds i.e retained profits = $40 million

Out of $40 million, $20 million has been financed by debt.

Thus, Debt to investments ratio is 0.5.

Lower the debt to investment ratio, better it is for the company since lower will be interest and principal repayment obligations.

3 0
3 years ago
Elson co, needs to raise debt and for this purpose issued two different bonds, Bond A and Bond B. Both bonds have 20 years to ma
slega [8]

Answer:

The right solution is "$20.733.16".

Explanation:

According to the question,

Face value,

= $20000

Rate (r),

= .035

Bond A:

= \frac{Face \ value}{(1+r)^n}

= \frac{20000}{(1+.035)^{40}}

= 5051.45 ($)

Bond B:

= \frac{1100\times 12.0941}{(1+.035)^{10}} + \frac{1400\times 10.9205}{(1+.035)^{26}} + \frac{20000}{(1+.035)^{40}}

= 9431.11+6250.6+5051.45

= 20733.16 ($)

5 0
3 years ago
In April 2013, Sparkle Enterprises purchased the Crimson Mine at a cost of $18,000,000. The mine is estimated to contain 500,000
DaniilM [7]

Answer:

The correct answer is B.

Explanation:

Giving the following information:

In April 2013, Sparkle Enterprises purchased the Crimson Mine for $18,000,000. The mine is estimated to contain 500,000 tons of ore with a residual value of $2,000,000 after mining operations are completed. During 2013, 120,000 tons of ore were removed from the mine and sold.

Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced

Annual depreciation= (16,000,000/500,000)*120,000= $3,840,000

6 0
3 years ago
On April 1, the price of gas at Bob’s Corner Station was $4.95 per gallon. On May 1, the price was $5.45 per gallon. On June 1,
AnnyKZ [126]

Answer: Please refer to Explanation

Explanation:

1. a. Between April 1 and May 1, Bob’s price increased by $0.50 , or by ___ %.

To calculate, divide the difference in the amounts by the amount the change occured from.

The price increased by $0.50 from $4.95. Percentage Increase should be,

= 0.5 / 4.96 * 100%

= <u>10.1%</u>

b. Between May 1 and June 1, Bob’s price decreased by $ , or ____ %.

The Price by $0.5 from $5.95 to $4.95

= 0.5/5.95

<u>= -9.17% (</u>negative because it was a price decrease)

2. Across the street, their price is 20% higher than Bob's.

When Bob's prices are $5.45, there's are,

= 5.45 * ( 1 + 20%)

= 5.45 * 1.2

= $6.54

Difference is,

= 6.54 - 5.45

= <u>$1.09</u>

3. The Fed raised it's rate from 2% to 2.75%.

The change is,

= 2.75% - 2%

= 0.75%

This is a percentage Change of,

= 0.75/2 * 100%

= 37.5%

This change of <u>0.75</u> percentage points means that the Fed raised its target by approximately <u>37.5%.</u>

8 0
3 years ago
Other questions:
  • “accounting is ingrained in our society and it is vital to our economic system.” do you agree? explain.
    10·1 answer
  • Anthony’s debit card was stolen and someone purchased over $1,000 worth of items on it. Which law or regulation protects Anthony
    8·1 answer
  • Johnny has 15 toys with a total value of $125. If some of Johnny's toys are worth $5 and the others are worth $10, how many toys
    7·1 answer
  • ​Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with On
    8·1 answer
  • Patricia Ness is a lawyer specializing in employment law. Her clients showed her that the right-to-work laws create many problem
    6·1 answer
  • Local government officials would like to know if city residents are generally satisfied with the cleanliness of local
    9·2 answers
  • Drag each option to the correct location on the image.
    7·1 answer
  • Inventory turnover is calculated as __________ divided by __________.
    5·2 answers
  • what are some of the biggest challenges in a for-profit business? (choose all that apply). a) make investment that consistently
    6·1 answer
  • Contribution margin ______.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!