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madreJ [45]
3 years ago
5

Miramar Industries manufactures two products, A and B. The manufacturing operation involves three overhead activities - producti

on setup, material handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities:
Activity Cost Activity Base
Production Setup $250,000 Number of setups
Material Handling $150,000 Number of parts
General Overhead $80,000 Number of direct labor hours

Each productâs total activity in each of the three areas are as follows:

Product A Product B
Number of setups 100 300
Number of parts 40,000 20,000
Number of direct labor hours 9,000 12,000
What is the activity rate for General Overhead?
A. $4.00 per direct labor hour
B. $3.81 per direct labor hour
C. $6.71 per direct labor hour
D. $4.20 per direct labor hour
Business
1 answer:
PolarNik [594]3 years ago
8 0

Answer:

General overhead= $3.81 per direct labor hour

Explanation:

Given the following information:

General Overhead $80,000 Number of direct labor hours

Number of direct labor hours 9,000 12,000= 21,000

<u>To calculate the activity rate, we need to use the following formula:</u>

Activity rate= estimated costs / total amount of allocation rate

General Overhead= 80,000 / 21,000

General overhead= $3.81 per direct labor hour

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Compute the Work-in-Process transferred to the finished goods warehouse on April 30 using the following information: Work-In-Pro
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Answer:

$700

Explanation:

Given that

Work-In-Process inventory, April 1 = $200

Direct materials used in production = $125

Direct labor costs incurred = $300

Manufacturing overhead costs = $250

Work-In-Process Inventory, April 30= $175

The computation work-in-progress transferred to the finished goods is given below :-

= Work-In-Process inventory, April 1 + Direct materials used in production + Direct labor costs incurred + Manufacturing overhead costs - Work-In-Process Inventory, April 30

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5 0
3 years ago
1. Soul Socket Inc. manufactures socket wrenches.
Svetlanka [38]

Answer:

a. $3.40 per wrench

b. $3.78 per wrench

c. $4 per wrench

d. $3.82 per wrench

Explanation:

a) Theoretical Fixed Manufacturing Overhead.

This is the cost associated with what the company can produce.

They can produce as much as 5,000 wrenches per day for 22 days on a budget of $374,000.

Theoretical Manufacturing Overhead is therefore,

= 374,000 / ( 5,000 * 22)

= $3.40 per wrench.

b. The Practical Fixed Overhead would be the costs to be incurred with the more likely level of production.

Company will more likely produce 4,500 wrenches a day.

Following from a,

= 374,000 / (4,500 * 22)

= 3.7778

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c. The normal overhead is the cost associated when the company produces according to demand.

The demand is expected to be 4,250 wrenches for the next 3 years.

Therefore,

= 374,000 ( 4,250 * 22)

= $4 per wrench.

d. The master budget overhead rate is cost associated with the level the company Plans to produce.

Soul Socket plans to produce 4,450 wrenches a day.

Therefore,

= 374,000 (4,450 * 22)

= $3.82 per wrench.

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Explanation:

Hope this helps!

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