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Romashka [77]
3 years ago
12

Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product

line, the controller, Robert Hermann, has developed the following information.
Car Truck
Estimated wheels produced 40,000 10,000
Direct labor hours per wheel 1 3

Total estimated overhead costs for the two product lines are $770,000.

Required:
a. Calculate overhead rate.
b. Compute the overhead cost assigned to the car wheels and truck wheels, assuming that direct labor hours is used to allocate overhead costs.
Business
1 answer:
Lorico [155]3 years ago
6 0

A) Direct labor hrs for car wheels = estimated wheels *direct labor per wheel  

40,000 *1hr = 40,000      

   

Direct labor hrs for Truck      

10,000 * 3hr= 30,000      

   

total direct labor hrs 40,000+30,000 = 70,000  hrs

Overhead rate is total est oh cost/ total direct labor hrs    

770,000/70,000= 11.00    

B) Car truck wheels 40,000*11 =440,000

Truck wheels 10,000*11=110,000

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Zander Inc. uses a job-order costing system in which any underapplied or overapplied overhead is closed to cost of goods sold at
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Answer:

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Complete unit in Job = 29,850 units

Per unit cost units

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5 0
2 years ago
Song, Inc., uses the high-low method to analyze cost behavior. The company observed that at 22,000 machine hours of activity, to
andriy [413]

Answer:

Variable cost per unit= $8.4

Explanation:

<u>First, we need to calculate the total cost for each level of machine hours:</u>

Low activity level:

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High activity level:

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<u>Now, we can determine the variable and fixed costs:</u>

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (760,000 - 734,800) / (25,000 - 22,000)

Variable cost per unit= $8.4

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 760,000 - (8.4*25,000)

Fixed costs= $550,000

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8 0
3 years ago
A firm has the balance sheet accounts, Common Stock and Paid-in Capital in Excess of Par, with values of $40,000 and $500,000, r
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$13.50/share

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Answer:

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