Characteristics of Production Process, Cost Measurement Vince Melders, of EcoScape Company, designs and installs custom lawn and garden Irrigation systems for homes and businesses throughout the state. Each fobis different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year: Number of direct labor hours 6,720 Direct labor cost $67,200 Overhead cost $50,400 During the year, the following actual amounts were experienced: Number of direct labor hours 6,045 Direct labor incurred $66,495 Overhead incurred $50,500 Vince Melders, owner of EcoScape, noticed that the watering systems for many houses in a local subdivision had the same layout and required virtually identical amounts of prime cost. Vince met with the subdivision builders and offered to install a basic watering system in each house. The idea was accepted enthusiastically, so Vince created a new company, Irrigation Specialties, to handle the subdivision business. In its first three months in business, Irrigation Specialties experienced the following: June July August Number of systems installed 48 68 88 Direct materials used $12,672 $17,952 $23,232 Direct labor incurred $8,448 $11.968 $15,488 Overhead $7,603.20 $8,377.60 $9,292.80 Required: Previous vet) Next Direct materials used Direct labor incurred $12,672 $17,952 $23,232 $8,448 $11,968 $15,488 $7,603.20 $8,377.60 $9,292.80 Overhead Required: 1. Should Irrigation Specialties use process costing or job-order costing? 2. Irrigation Specialties uses an actual costing system, what is the cost of a single system installed in June? In July? In August? Round your answers to the nearest dollar June per system July per system per system August 3. Now assume that Irrigation Specialties use a normal costing system. Estimated overhead for the year is $41,600, and estimated production is 520 watering systems. What is the predetermined overhead rate per system? per system installed What is the cost of a single system installed in June? In Sullin August? June per system July per system August per system Net) Enter Save and Submers for Grading MacBook Air $ 4 % 5 & 7 00 * 9 0 6 P R E o Y U F J L B N M V. 92 command option Calculator eBook Direct materials used $17,952 Direct labor incurred 58,448 $11,968 $15,488 $7,603.20 $8,377.60 $9,292.80 Overhead Required: 1. Should Irrigation Specialties use process costing or job-order costing? 2. If Irrigation Specialties uses an actual conting system, what is the cost of a single system installed in June? In July? In August Round your answers to the nearest dollar June per system July August per system 3. Now assume that Irrigation Specialties uses a normal costing syster Estimated overhead for the year is 541,600, and estimated production is so watering systems. What is the predetermined overhead rate per system? per system installed What is the cost of a single system installed in June? In July? In August une July per system per system August Previous Next Cho My Won Email Instructor Save and Submit Anment for Grading MacBook Air s $ % 5 8 7 8 9 6 O T Y U R G F H A B V N M
