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Ilya [14]
3 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]3 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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Anna71 [15]

Answer:

Borrow $6,300.

Explanation:

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and anticipates $31,900 in cash receipts

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This gives a positive balance of (10,100 + 31,900 - 38,300) $3,700 and

To maintain the $10,000 required balance, during June the company must:Borrow $6,300.

8 0
3 years ago
Read 2 more answers
A firm can produce two products with the cost function c(q1, q2) = 10 5q1 5q2 - 0. 2q1q2. the firm enjoys:____.
Llana [10]

The correct option for The firm enjoys economies of scope.

economies of scope exist if C(Q1, 0) + C(0, Q2) > C (Q1, Q2) (10 + 5Q1) + (10 + 5Q2) > 10 + 5Q1 + 5Q2 - 0.2Q12Q2.

Economies of scope is an economic theory stating that the average total cost of production decrease as a result of increasing the number of different goods produced. For example, a gas station that sells gasoline can sell soda, milk, baked goods, etc.

Economies of scope is a financial precept wherein a commercial enterprise's unit value to supply a product will decline because the form of its products will increase. In different words, the extra one of kind-but-comparable goods you produce, the lower the total cost to provide each one may be.

Your question is incomplete. Please read below for the missing content.

A firm can produce two products with the cost function C(Q1, Q2) = 10 + 5Q1 + 5Q2 - 0.2Q1Q2. The firm enjoys:

A. economies of scale in the two products separately.

B. economies of scope.

C. cost complementarity.

D. economies of scale in the two products separately and cost complementarity.

Learn more about Economies here brainly.com/question/17996535

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6 0
1 year ago
LO 2.1Which of the following is the primary source of revenue for a service business?
malfutka [58]

Answer:

providing intangible goods and services

Explanation:

A service business is an organisation that provides services.

Examples of service businesses are airlines, insurance companies, and hospitals.

I hope my answer helps you

3 0
3 years ago
Read 2 more answers
When the company is hosting an event, managers should assign event preparations to a ________. Preparations include trucking in
zimovet [89]

Answer:

The correct word for the blank space is:  cross-functional team.

Explanation:

Cross-functional teams are groups of people working for a common objective with different functional experience. Employees from the departments of accounting, marketing, logistics, and human resources could be within the organization. <em>Catering </em>firms fall under this type of category.

8 0
3 years ago
You would like to establish a trust fund that will provide $50,000 a year forever for your heirs. The trust fund is going to be
Finger [1]

Answer:

$1,818,181.81

Explanation:

Data provided:

Amount that will be provided a year = $50,000

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Now,

The Present value of perpetuity is given as:

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on substituting the respective values, we get

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Present value of perpetuity = $1,818,181.81

Hence,

The amount that must be deposited today to fund this gift is $1,818,181.81

5 0
3 years ago
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