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
gizmo_the_mogwai [7]
3 years ago
9

Primera Company produces two products and uses a predetermined overhead rate to apply overhead. Primera currently applies overhe

ad using a plantwide rate based on direct labor hours. Consideration is being given to the use of departmental overhead rates where overhead would be applied on the basis of direct labor hours in Department 1 and on the basis of machine hours in Department 2. At the beginning of the year, the following estimates are provided:
Department 1 Department 2
Direct labor hours 640,000 128,000
Machine hours 16,000 192,000
Overhead cost $384,000 $1,152,000
Actual results reported by department and product during the year are as follows:
Department 1 Department 2
Direct labor hours 627,200 134,400
Machine hours 17,600 204,800
Overhead cost $400,000 $1,232,000
Product 1 Product 2
Direct labor hours:
Department 1 480,000 147,200
Department 2 96,000 38,400
Machine hours:
Department 1 8,000 9,600
Department 2 24,800 180,000
Required:
1. Compute the plantwide predetermined overhead rate and calculate the overhead assigned to
each product.
2. Calculate the predetermined departmental overhead rates and calculate the overhead
assigned to each product.
3. Using departmental rates, compute the applied overhead for the year. What is the under- or
overapplied overhead for thefirm?
4. Prepare the journal entry that disposes of the overhead variance calculated in Requirement
3, assuming it is not material in amount. What additional information would you need if
the variance is material to make the appropriate journal entry?
Business
1 answer:
pychu [463]3 years ago
3 0

Answer:

Primera Company

1. Plantwide predetermined overhead rate:

= $1,536,000/768,000

= $2.00 per direct labor hour

Overhead assigned to each product:

                                   Product 1    Product 2

Direct labor hours     480,000        147,200

Predetermined overhead

 rate  = $2 per direct labor hour

Total overhead =    $960,000    $294,400

2. Predetermined departmental overhead rates:

Department 1:    

Direct labor hours $2 ($1,536,000/768,000)

Department 2

Machine hours = $7.385 ($1,536,000/208,000)

Overhead assigned:

Product 1 = $960,000 (480,000 * $2)

Product 2 = $70,896 (9,600 * $7.385)

3. The applied overhead for the year:

Department 1 = $1,254,400 (627,200 * $2)

Department 2 = $1,512,448 (204,800 * $7.385)

Total   =            $2,766,848

Overapplied overhead for the firm = $1,134,848 ($2,766,848 - $1,632,000)

4. Debit Manufacturing overhead $1,134,848

Credit Cost of goods sold $1,134,848

To transfer the overapplied overhead to cost of goods sold.

Additional information needed if the variance is material is to determine the percentages to allocated to Work in process, Finished Goods, and Cost of Goods Sold.

Explanation:

a) Data and Calculations:

Estimates:

                            Department 1   Department 2      Total  

Direct labor hours    640,000            128,000        768,000

Machine hours            16,000            192,000        208,000

Overhead cost       $384,000       $1,152,000    $1,536,000

Actual results:

                            Department 1   Department 2      Total  

Direct labor hours     627,200             134,400       761,600

Machine hours             17,600            204,800      222,400

Overhead cost       $400,000       $1,232,000  $1,632,000

                       Product 1 Product 2        Total  

Direct labor hours:

Department 1 480,000    147,200      627,200

Department 2  96,000     38,400       134,400

Machine hours:

Department 1    8,000        9,600         17,600

Department 2 24,800    180,000      204,800

You might be interested in
A middle-aged widowed customer has an investment objective of stable income and would also like to receive occasional "extra" in
Illusion [34]

Answer: Participating preferred

Explanation:

Participating preferred is a stock which pays specific dividends rate to their customers and also receives additional dividends, this is made known Board of Directors and paid by the company, this meets up with the objectives a customers has for investing and having a stable income. It is so known as performance preferred and it gives the holder the benefit of collecting extra dividends.

6 0
3 years ago
Which of the following relationships between book value and cash received at sale results in a loss on the sale of a long-term d
creativ13 [48]

Answer:

a. Book value is greater than cash received.

Explanation:

Book value of an asset is the cost of an asset less accumulated depreciation

Cash received is the price the asset is sold for.

If the asset is sold for less than its book value, it is sold at a loss

If an asset is sold for more than its book value, it is sold at a gain

8 0
3 years ago
5.
rosijanka [135]
195x6=1170, so he will have 1170 dollars in his college fund by senior year
6 0
3 years ago
Which of the following is false? Economists who advocate discretionary monetary policy argue that it is more likely to achieve t
just olya [345]

Answer: None of the above

Explanation:

All of the above are correct.

For option A, Economists who advocate discretionary monetary policy do indeed believe that the monetary authority using this policy is more flexible to shape the best monetary policy to the existing circumstances.

Option B is also correct because Crowding out occurs when the government increases investment by borrowing which leaves less money for the private sector to borrow so they spend less. The government spent money here yet the private sector did not spend less so it is Zero Crowing out.

Option C by option B's explanation holds true because the entire amount the Government increased by was denied the private sector.

Option D is also true as not all Economists prefer rule-based monetary policy to discretionary monetary policy.

They are all true.

3 0
3 years ago
Caribou Gold Mining Corporation is expected to pay a dividend of $6 in the upcoming year. Dividends are expected to decline at t
Whitepunk [10]

The question is incomplete. Here is the complete question.

Caribou Gold Mining Corporation is expected to pay a dividend of $6 in the upcoming year. Dividends are expected to decline at the rate of 3% per year. The risk-free rate of return is 5%, and the expected return on the market portfolio is 13%. The stock of Caribou Gold Mining Corporation has a beta of .5. Using the constant-growth DDM, the intrinsic value of the stock is _________. A. $150 B. $50 C. $100 D. $200

Answer:

$50

Explanation:

Caribou Gold mining corporation is expected to make a dividend payment of $6 next year

Dividend are expected to decline at a rate of 3%

= 3/100

= 0.03

The risk free rate of return is 5%

= 5/100

= 0.05

The expected return on the market portfolio is 13%

= 13/100

= 0.13

The beta is 0.5

The first step is to calculate the expected rate of return

= 0.05+0.5(0.13-0.05)

= 0.05+0.5(0.08)

= 0.05+0.04

= 0.09

Therefore, the intrinsic value of the stock using the constant growth DDM model can be calculated as follows

Vo= 6/(0.09+0.03)

Vo= 6/0.12

Vo= $50

Hence the intrinsic value of the stock is $50

8 0
3 years ago
Other questions:
  • Big John's Manufacturing Company currently produces its lead product on an "Old Machine" that has a variable cost of $0.32 per u
    11·1 answer
  • What is revolving credit? A. Credit when the borrower makes regular monthly payments B. Credit that requires payment in full on
    5·2 answers
  • Which of the following statements about the debate over stabilization policy are correct? Check all that apply. Advocates of act
    6·2 answers
  • A _____relationship would include your coworkers and friends
    10·2 answers
  • The fund has not borrowed any funds, but its accrued management fee with the portfolio manager currently totals $25,000. There a
    6·1 answer
  • A company had net sales of $752,000 and cost of goods sold of $543,000. Its net income was $17,530. The company's gross margin r
    7·1 answer
  • A firewall can help to prevent which type of security breach?
    8·2 answers
  • Are asains attractive. <br> if u say no, u eat peanutbutter between my 98 yr old grandpas toes ;)
    11·2 answers
  • Holiday Shipping Express is considering a project that will require $28,000 in net working capital and $87,000 in fixed assets.
    11·1 answer
  • Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials, $9.10; direct
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!