Stanfil Corporation developed a cost function for manufacturing overhead costs of Y = $8,000 + $1.60X. Estimated manufacturing overhead costs at 10,000 units of production are a. $16,000. b. $17,600. c. $24,000. d. $26,000.
2. The following information pertains to Whitestone Industries for 2014:
Estimated total overhead costs for 2014 Estimated direct labor costs for 2014 Actual direct labor costs Actual overhead costs Activity base
What is the predetermined overhead rate for Whitestone Industries for 2014? a. 66.7% b. 150% c. 160% d. 62.5%
Figure 4-20
$37,500 25,000 22,500 36,000 Direct labor costs
Quasi-Tech Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. Costs have been assigned to each activity using direct tracing and resource drivers:
Activity Expected Cost Activity Driver Activity Capacity Engineering $1,000,000 engineering hours 5,000 hours Setups $ 900,000 setups 200 setups Machining $2,000,000 machine hours 25,000 machine hours Inspection $ 800,000 inspection hours 2,500 inspection hours
Owens produces two models: Model X and Model Y. The following table shows how the two products consume activity.
Model C Model D Units completed 300,000 200,000 Engineering hours 1,000 4,000 Setups 80 120 Machine hours 20,000 5,000 Inspection hours 1,500 1,000