Applying Factory Overhead

Keenan Company estimates that total factory overhead costs will be $336,000 for the year. Direct labor hours are estimated to be 24,000.

a. For Keenan Company, determine the predetermined factory overhead rate using direct labor hours as the activity base. $ per direct labor hour

b. During May, Keenan Company accumulated 750 hours of direct labor costs on Job 200 and 710 hours on Job 305. Determine the amount of factory overhead applied to Jobs 200 and 305 in May. $_______

a. Determine the rate by spreading the estimated overhead costs over the allocation base.

b. Multiply the job hours by the predetermined overhead rate.

c. Prepare the journal entry to apply factory overhead to both jobs in May according to the predetermined overhead rate.

	Work in Process
	Factory Overhead

Units to be Assigned Costs

Oak Ridge Steel Company has two departments, Casting and Rolling. In the Rolling Department, ingots from the Casting Department are rolled into steel sheet. The Rolling Department received 61,700 tons from the Casting Department. During July, the Rolling Department completed 76,600 tons, including 20,500 tons of work in process on July 1. The ending work in process inventory on July 31 was 5,600 tons.

How many tons were started and completed during July? ______tons

Equivalent Units of Materials Cost

The Rolling Department of Oak Ridge Steel Company had 4,400 tons in beginning work in process inventory (80% complete) on July 1. During July, 73,800 tons were completed. The ending work in process inventory on July 31 was 3,700 tons (20% complete).

What are the total equivalent units for direct materials for July if materials are added at the beginning of the process? _______units

Single Plantwide Factory Overhead Rate

The total factory overhead for Bardot Marine Company is budgeted for the year at $2,415,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboat and bass boat each require five direct labor hours for manufacture. Each product is budgeted for 10,500 units of production for the year.

When required, round all per unit answers to the nearest cent.

a. Determine the total number of budgeted direct labor hours for the year. direct labor hours

b. Determine the single plantwide factory overhead rate. $ per dlh

c. Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate.

Speedboat	$ per unit
Bass boat	$ per unit

Multiple Production Department Factory Overhead Rates

The total factory overhead for Bardot Marine Company is budgeted for the year at $1,571,500, divided into two departments: Fabrication, $1,155,000, and Assembly, $416,500. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require two direct labor hours in Fabrication and four direct labor hours in Assembly. The bass boats require four direct labor hours in Fabrication and three direct labor hours in Assembly. Each product is budgeted for 7,000 units of production for the year.

When required, round all per unit answers to the nearest cent.

a. Determine the total number of budgeted direct labor hours for the year in each department.

Fabrication	direct labor hours
Assembly	direct labor hours

b. Determine the departmental factory overhead rates for both departments.

Fabrication	$ per dlh
Assembly	$ per dlh

c. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.

Speedboat:	$ per unit
Bass boat:	$ per unit

Activity-Based Costing: Factory Overhead Costs

The total factory overhead for Bardot Marine Company is budgeted for the year at $1,195,500, divided into four activities: fabrication, $660,000; assembly, $243,000; setup, $157,500; and inspection, $135,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows:

	Fabrication		Assembly		Setup		Inspection
Speedboat	7,500	dlh	20,250	dlh	54	setups	94	inspections
Bass boat	22,500		6,750		396		656
	30,000	dlh	27,000	dlh	450	setups	750	inspections

Each product is budgeted for 5,500 units of production for the year.

a. Determine the activity rates for each activity.

Fabrication	$ per direct labor hour
Assembly	$ per direct labor hour
Setup	$ per setup
Inspection	$ per inspection

b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.

Speedboat	$ per unit
Bass boat	$ per unit

Activity-Based Costing: Selling and Administrative Expenses

Jungle Junior Company manufactures and sells outdoor play equipment. Jungle Junior uses activity-based costing to determine the cost of the sales order processing and the customer return activity. The sales order processing activity has an activity rate of $84 per sales order, and the customer return activity has an activity rate of $5 per return. Jungle Junior sold 10,000 swing sets, which consisted of 5,600 orders and 500 returns.

a. Determine the total sales order processing and customer return activity cost for swing sets. $

b. Determine the per-unit sales order processing and customer return activity cost for swing sets. If required, round your answer to the nearest cent. $____per unit

Activity-Based Costing for a Service Business

Sterling Hotel uses activity-based costing to determine the cost of servicing customers. There are three activity pools: guest check-in, room cleaning, and meal service. The activity rates associated with each activity pool are $8.10 per guest check-in, $19.00 per room cleaning, and $4.00 per served meal (not including food). Janelle Washington visited the hotel for a 3-night stay. Janelle had 7 meals in the hotel during the visit.

Determine the total activity-based cost for Washington's visit during the month. Round your answer to the nearest cent. $____

Single Plantwide Factory Overhead Rate

Mozart Music Inc. makes three musical instruments: trumpets, tubas, and trombones. The budgeted factory overhead cost is $3,469,400. Factory overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit:

	Budgeted Production Volume		Direct Labor Hours Per Unit
Trumpets	4,000	units	1.2
Tubas	1,200		0.9
Trombones	2,500		1.3

a. Determine the single plantwide factory overhead rate. $ per direct labor hour

b. Use the factory overhead rate in (a) to determine the amount of total and per-unit factory overhead allocated to each of the three products.

	Total Factory Overhead Cost	Per Unit Factory Overhead Cost
Trumpets	$	$
Tubas
Trombones
Total	$