Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with
Adriana Corporation manufactures football equipment. In planning for next year, the managers want to understand the relation between activity and overhead costs. Discussions with the plant supervisor suggest that overhead seems to vary with labor-hours, machine-hours, or both. The following data were collected from last year's operations. Month Labor-Hours Machine-Hours Overhead Costs 1 730 1,348 $ 102,687 2 715 1,413 103,704 10 11 12 3456789012 690 1,527 109,971 750 1,446 108,354 775 1,584 116,142 755 1,570 114,409 735 1,381 107,067 715 1,317 102,014 705 1,447 106,334 790 1,535 113,180 675 1,286 715 1,608 97,966 110,363 Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. b. Managers expect the plant to operate at a monthly average of 1,500 machine-hours next year. What are the estimated monthly overhead costs, assuming no inflation? Complete this question by entering your answers in the tabs below. Required A Required B Use the high-low method to estimate the fixed and variable portions of overhead costs based on machine-hours. (Round "Variable cost" answer to 2 decimal places.) Variable cost (per machine hour) Fixed cost < Required A Required B > Channing Corporation makes two products (A1 and B2) that require direct materials, direct labor, and overhead. The following data refer to operations expected for next month. Revenue Direct material Direct labor Overhead: Direct-material related Direct-labor related A1 Total $120,000 $360,000 $480,000 40,000 80,000 120,000 44,000 104,500 B2 148,500 20,400 17,820 Required: Channing uses a two-stage cost allocation system, It uses direct-material costs to allocate direct-materials related overhead and direct- labor costs to allocate direct-labor related overhead costs. a. Compute the direct-material related overhead rate for next month. b. Compute the direct-labor related overhead rate for next month. c. What is the total overhead allocated to product A1 next month? d. What is the total overhead allocated to product B2 next month? a. Predetermined rate b. C. Predetermined rate Total overhead (A1) d. Total overhead (B2) % of direct-materials cost % of direct-labor cost
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started