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Angelina_Jolie [31]
3 years ago
14

Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products. Manufacturing over

head costs are allocated on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department. At the beginning of​ 2018, the following estimates were provided for the coming​ year:
Machining Assembly
Direct labor-hours 40,000 40,000
Machine-hours 50,000 20,000
Direct labor costs $ 525,000 $ 875,000
Manufacturing overhead costs $ 280,000 $ 360,000

The accounting records of the company show the following data for Job​ #316:
Machining Assembly
Direct labor-hours 120 75
Machine-hours 45 5
Direct material cost $ 250 $ 125
Direct labor cost $ 300 $ 325

What amount of manufacturing overhead costs will be allocated to Job​ #316?
Business
1 answer:
Diano4ka-milaya [45]3 years ago
5 0

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Manufacturing overhead costs are allocated based on machine-hours in the Machining Department and based on direct labor-hours in the Assembly Department.

Machining:

Machine-hours= 50,000

Manufacturing overhead costs= $ 280,000

Assembly:

Direct labor-hours= 40,000

Manufacturing overhead costs= $ 360,000

First, we need to calculate the estimated overhead rate for each department:

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

<u>Machining:</u>

Estimated manufacturing overhead rate= 280,000/50,000= $5.6 per machine hour

<u>Assembly:</u>

Estimated manufacturing overhead rate= 360,000/40,000= $9 per direct labor hour

Now, we can allocate overhead to Job 316:

Machining Assembly

Direct labor-hours 120 75

Machine-hours 45 5

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Machining:

Allocated MOH= 5.6*45= $252

Assembly:

Allocated MOH= 9*75= $675

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Capital Intensity Ratio = Total Assets/Total Revenue

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Capital intensity ratio = ($389,100 /0.086) / ($389,100 / 0.028) =0.33

This ratio reveals how much capital or other resources a company has to have in order to make single dollar in sales. This ratio is the inverse of the asset turnover ratio, making it simple to calculate the capital intensity ratio if you already know the asset turnover ratio. For all capital-intensive firms, we require a good or higher capital intensity ratio. A company that invests a significant amount of capital in its manufacturing process is said to be capital-intensive. E.g., Power generating facilities. A company that has made significant investments in assets to generate income has a high capital intensity ratio (CIR). A company with a low CIR is able to produce larger revenues while owning fewer assets. As a result, businesses can use this ratio to modify their capital budgeting and planning.

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5 0
2 years ago
Geraldo is a vice president at Magnolis Inc. He, along with a few other individuals in his rank, is responsible for setting the
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Answer: Top management

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In the above case, Geraldo is the vice president of the company and also he is responsible for determining the directions of operations of the company thus we can consider him in the top management.

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3 years ago
Jay's new loan to purchase a property includes the seller's existing mortgage. What type of loan is this
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The type of loan that this is known to represent is what is referred to as the wraparound mortgage loan.

<h3>What is the wraparound mortgage loan?</h3>

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This type of loan is beneficial to a person given that they would be able to get a system of loan that may not have been possible before.

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8 0
2 years ago
Mr. Barker enjoys a comfortable retirement income. He recently had surgery and expected that he would have certain services and
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Answer:

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