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ABC Company uses a jab-order costing system and a predetermined averhead rate based on machine hours. At the beginning of the year, the company estimated
ABC Company uses a jab-order costing system and a predetermined averhead rate based on machine hours. At the beginning of the year, the company estimated the followings Factory averhead Machine hours 50,000 8,000 The following information pertains to December of the current year Jab 101 6.000 Jab 301 1,500 Jab 201 $ 2.500 Work-in-Process, December 1 Materials requisitioned 1,200 1,000 800 $ 650 Direct labor cost 400 S 260 100 Actual machine hours 300 200 Actual manufacturing overhead incurred in December $ 5,000 The Campany bills completed job at cast plus 50%. Required: a) Compute the predetermined overhead application rate (1 Mark) Determine the costs of the three jobs ) (6 Marks) Jab 101 Jab 201 Jab 301 If Job 101 was campleted, what is the balance of Wark-in-process as at December 31? (1 Mark) d) Campute the billing price of Job 1 (1 Mark) ) an December 1, what is the balance as at December 31? If there was no balance in the Overhead Contral account an (2 Marks) Please put corect answer in the underlined space provided. ABC Company is considering changing its cost structure by imvesting in autamation which means acquiring computer-contraled robots and reducing the labar foroe. Data for the aurrent environment and the new autamated enviranment are as follaws: Current New Unit variable cost Material Labor Total per unit Monthly fixed oosts Rent and amartization Supervisory labor Other Total per month 1.00 1,40 2.40 1.00 0.20 1.20 910,000,00 120,000.00 80.000.00 S1,110,000.00 S460,000.00 100.000,00 50,000.00 610.000.00 Expected volume Capacity volume 600,000 900,000 units units Sale price per unit 4.50 Required: Compute the budgeted prafit at the expected volume under (5 Marks) a) both current and new environments Current Environment New Environment b) Compute the budgeted profit for both current and new volume of sales falls to (2 Marks) 300,000 Current Environment enviranments units New Environment Compute the budgeted prafit for both current and new enviranments ifvolume of sales increases to (2 Marks) New Environment 900.000 units Current Environment
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