Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

a - 1 . Assume the Saint Cloud plant uses a single plantwide overhead rate to assign all overhead ( plantwide and department ) costs

image text in transcribed
a-1. Assume the Saint Cloud plant uses a single plantwide overhead rate to assign all overhead (plantwide and department) costs to jobs. Use expected total direct labor hours to compute the overhead rate.
a-2. What is the expected cost per unit produced for job number 110?
b-1. Find the plant wide overhead rate by using expected machine hours.
b-2. Find the department overhead rate using expected machine hours for Department A and Department B.
b-3. Calculate the projected manufacturing costs per unit for job 110 using the three separate rates computed.
c-1. The sales policy at the Saint Cloud plant dictates that job bids be calculated by adding 21 percent to total manufacturing costs. What would be the bid for job number 110 using an overhead rate of $16.14 per direct labor hour?
c-2. The sales policy at the Saint Cloud plant dictates that job bids be calculated by adding 21 percent to total manufacturing costs. What would be the bid for job number 110 using the following three separate overhead rates based on machine hours?
Plantwide rate of $4.03 per machine hour
Department A overhead rate of $13.00 per machine hour
Department B overhead rate of $13.50 per machine hour
c-3. Which of the overhead allocation methods would you recommend?
d. Compute the under- or overapplied overhead for the Saint Cloud plant for the year assuming the Saint Cloud plant uses three separate overhead rates to assign overhead costs to jobs based on machine hours.
Note: Round your intermediate calculations to 2 decimal places.
f. A Saint Cloud subcontractor has offered to produce the parts for job number 110 for a price of $10 per unit. Assume the Saint Cloud sales force has already committed to the bid price of $90,090.50. Compute incremental cost (benefit) to make if the Saint Cloud plant could use the facilities necessary to produce parts for job number 110 for another job that could earn an incremental profit of $23,000? Assume the Saint Cloud plant uses three separate overhead rates to assign overhead costs to jobs based on machine hours.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials of Accounting for Governmental and Not for Profit Organizations

Authors: Paul A. Copley

13th edition

125974101X, 978-1259741012

More Books

Students also viewed these Accounting questions