150. Outer Limits, Inc. produces fencing units which require two processes, A and B, to complete. The best-selling type of fence is made of pvc. Information related to the 8,000 units of pvc fencing produced annually is shown below.
Direct materials
|
$450,000
|
Direct labor
|
|
Department A (5,000 DLH x $23 per DLH)
|
$115,000
|
Department B (4,000 DLH x $25 per DLH)
|
$100,000
|
Machine hours
|
|
Department A
|
2,000 MH
|
Department B
|
3,000 MH
|
Outer Limits’ total expected overhead costs and related overhead data are shown below. The company uses departmental overhead rates based on machine hours in department A and direct labor hours in department B.
|
Department A
|
Department B
|
Direct labor hours
|
9,000 DLH
|
7,000 DLH
|
Machine hours
|
6,500 MH
|
13,000 MH
|
Manufacturing overhead costs
|
$54,600
|
$67,060
|
Determine the total amount of overhead assigned to each unit of pvc fencing.
151. A company’s total expected overhead costs and related overhead data are shown below.
|
Department A
|
Department B
|
Direct labor hours
|
75,000 DLH
|
30,000 DLH
|
Machine hours
|
3,000 MH
|
6,000 MH
|
Manufacturing overhead costs
|
?
|
?
|
Departmental overhead rate
|
$2.40 per DLH
|
$36 per MH
|
a. Compute estimated manufacturing overhead costs for Department A.
b. Compute estimated manufacturing overhead costs for Department B.
152. A company’s total expected overhead costs and related overhead data are shown in the following table:
|
Department A
|
Department B
|
Direct labor hours
|
85,000 DLH
|
72,000 DLH
|
Machine hours
|
79,050 MH
|
37,395 MH
|
Manufacturing overhead costs
|
?
|
?
|
Departmental overhead rate
|
$4 per MH
|
$8.31 per DLH
|
a. Compute estimated manufacturing overhead costs for Department A.
(b. Compute estimated manufacturing overhead costs for Department B.
c. Compute the departmental overhead rate based on direct labor hours for Department A.
d. Compute the departmental overhead rate based on machine hours for Department B.
153. Rising Sun, Inc. produces granola that requires two processes, mixing and baking, to complete. The best-selling type of granola is cherry almond delight. Information related to the 100,000 units of cherry almond delight produced annually is shown in the following table:
Direct materials
|
$230,000
|
Direct labor
|
|
Mixing Department (600 DLH x $24 per DLH)
|
$14,400
|
Baking Department (400 DLH x $22 per DLH)
|
$8,800
|
Machine hours
|
|
Mixing Department
|
200 MH
|
Baking Department
|
300 MH
|
Rising Sun’s total expected overhead costs and related overhead data are shown below. The company uses departmental overhead rates based on machine hours in the mixing department and direct labor hours in the baking department.
|
Mixing Department
|
Baking Department
|
Direct labor hours
|
11,000 DLH
|
5,000 DLH
|
Machine hours
|
4,000 MH
|
3,000 MH
|
Manufacturing overhead costs
|
$80,000
|
$12,500
|
Determine the total product cost of this product line and each unit of cherry almond delight.
154. Slosh, Inc. produces washing machines that require two processes, assembling and finishing, to complete. The company’s bestselling machine is the commercial washer. Information related to the 500 commercial washers produced annually is shown below.
Direct materials
|
$161,000
|
Direct labor
|
|
Assembling Department (1,000 DLH x $25 per DLH)
|
$25,000
|
Finishing Department (250 DLH x $22 per DLH)
|
$5,500
|
Machine hours
|
|
Assembling Department
|
1,500 MH
|
Finishing Department
|
400 MH
|
Slosh’s total expected overhead costs and related overhead data are shown below. The company uses departmental overhead rates based on direct labor hours in the Assembling Department and machine hours in the Finishing Department.
|
Assembling Department
|
Finishing
Department
|
Direct labor hours
|
50,000 DLH
|
275,000 DLH
|
Machine hours
|
37,500 MH
|
8,000 MH
|
Manufacturing overhead costs
|
$4,000,000
|
$60,000
|
Determine the total product cost of this product line and each individual commercial washer.