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Ilya [14]
4 years ago
13

Smith Machining makes three products. The company’s annual budget includes $1,048,000 of overhead. In the past, the company allo

cated overhead based on expected capacity of 40,000 direct labor hours. The company recently implemented an activity-based costing system and has determined that overhead costs can be broken into four overhead pools: order processing, setups, milling, and shipping. The following is a summary of company information: Expected Cost Expected Activities Order processing $ 226,800 14,000 orders Setups 157,850 4,100 setups Milling 395,850 20,300 machine hours Shipping 267,500 25,000 shipments $ 1,048,000 (a) Calculate the company’s overhead rate based on direct labor hours. (Round answer to 2 decimal places, e.g. 15.25.) Overhead rate $ / DLH (b) Calculate the company’s overhead rates using the activity-based costing pools. (Round answers to 2 decimal places, e.g. 15.25.) Order processing $ per order Setups $ per setup Milling $ per machine hour Shipping $ per shipment
Business
1 answer:
Flauer [41]4 years ago
6 0

Answer:

The computation is shown below:

Explanation:

a. The company overhead rate based on direct labor is

= Total Overheads ÷ Direct Labor Hours

= $1,048,000 ÷ 40,000

= $26.2 per hour

b) Overheads Rate using Activity Based Costing  is

= Cost ÷ Activity level

For  Order Processing, it is

= $226,800 ÷ 14,000 orders

= $16.2 per order

For setups, it is

=  $157850 ÷ 4,100 setup

= $38.5 per setup

For Milling, it is  

= $395,850 ÷ 20,300 machine hours

= $19.5 per machine hour

For Shipping

= $267,500 ÷ 25,000

= $10.7 per shipment

We simply applied the above formula so that the per unit could come

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7 0
3 years ago
Curvilinear costs always increase: a. When management performs break-even analysis. b. When volume increases, but at a nonconsta
Ilia_Sergeevich [38]

Answer:

The correct option is : b. When volume increases, but at a nonconstant rate.

Explanation:

Curvilinear costs is a type of expense that <u>does not increase at a constant rate with the production volume.</u> It tends to have a sudden increase at low production volumes, then remains constant in the middle and then increases at high production volumes.

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6 0
4 years ago
Students interested in working as a chef might participate in what?
kolezko [41]
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7 0
3 years ago
Read 2 more answers
University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developi
expeople1 [14]

Answer:

First calculate total machine hours

1500 + 1500 + 4500 = 7500 total machine hours

personnel   = 1500/7500 x 4,800

printing   = 1500/7500 x 4,800

developing = 4500/7500 x 4,800

for personnel:

500 printing + 3,500 developing = 4,000

For Departments:

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6 0
3 years ago
Specialty stores like Lids carry ________ with ________. A. wide product lines; shallow assortments B. narrow product lines; sha
4vir4ik [10]

Answer:

narrow product lines; deep assortments

Explanation:

product line is group of same type of product selling under a same brand name.

narrow and wide product line is defined on the basis of number of type of product being sold by a retailer.

Narrow product line is a retailing strategy which means that few type of products which is being sold by a retailer.

Example: Pizza hut which sells only limited number of eatables thus they have narrow product lines

Wide product line means very high number of different type of product is being sold by the retailer.

Example:wall mart which sells wide number of products

Assortment is strategy in retail which defines number of different brands of same type of product which is being sold by a retails.

It is of two types

shallow assortments: It means very few brands of same type of product is offered by a retailer.

deep assortment: It means large of number of different brand of same type of product is being sold by a retailer.

Specialty stores are store which sell only limited type of product but they offer wide variety of choices of brand for the products which they sell. In retail marketing term they keep narrow product line but deep assortments as mentioned in the definitions above

Since Lids is a specialty store the correct option would be narrow product line, deep assortments.

4 0
3 years ago
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