AutoSave OFF Ch 4 Homework Q v Home Insert Draw Page Layout Formulas Data Review View Share Comments Ruler Formula Bar Zoom 75% Split Hide FO Normal Page Break Page Custom Gridlines Headings 100 Zoom to 100% Zoom to New Arrange Freeze Freeze Freeze First Switch View Record Use Relative Preview Layout Views Selection Window All Panes Top Row Column Unhide Windows Macros Macro References J2 X V fx C D E G H M N Solution Code 3654 Problem B Problem B (a) Compute overhead allocation rates (POHR) for each of the cost drivers and for direct labor. Hint ? (a) Compute overhead allocation rates for each of the cost drivers and for direct labor Activity Rate (or POHR) = Estimated Cost / Estimated Cost drive for the company. Activity Estimated Costs Estimated cost driver Activity Rate (predetermined overhead rate) Activity Estimated Costs Estimated cost driver Activity Rate (predetermined overhead rate) Production setup per run Production setup $30,000 100 runs $300 per run Order processing per order Order processing 50,000 200 orders 250 per order 10 Materials handling per pound (Ib) Materials handling 20,000 8,000 Ibs. 2.5 per pound (1b) 11 Equip deprec & maint per machine hour Equip deprec & maint 60,000 10,000 machine hrs 6 per machine hour Quality mangement per inspection Quality mangement 50,000 40 inspections 1250 per inspection 13 Packing and shipping per unit Packing and shipping 40,000 20,000 units per unit 14 15 Direct labor $250,000 per direct labor hour Direct labor $250,000 2500 DL hours 100 per direct labor hour (use total 16 17 (use total overhead for direct labor) DL Rate Self Check: Hint? Base is the Direct labor hours in a typ iical year provided in the directions. 18 19 (b)Compute the production costs (DM, DL and Overhead applied) using direct labor as the ONLY allocation base for overhead. (b)Compute the production costs (DM, DL and Overhead applied) using direct labor as the ONLY allocation base for overhead. (Show calculations in the row below when needed) 20 (Show calculations in the row below) 21 Nerds Stars Fashions Nerds Stars Fashions 22 Direct materials Hint ? Direct material February cost given in n problem Direct materials $4,000 $2,500 $2,000 23 Direct labor Hint? Feburary DL hours x DL cost of $15 pt :r hour) (given in problem) 24 (show calculations in this row) Direct labor 1,500 1,500 1,335 25 Overhead applied Hint ? (February DL hours x POHR calculated above for di (DL hours x DL cost of $15 per hour) (100 DL hour x $15 per hour) (89 DL hours x $15) 26 (show calculations in this row) Overhead applied 10,000 10,000 8,900 27 TOTAL COST (DL hours x POHR calculated for direct labor) (100 DL hours x $100 per hour) (89 DI hr x $100 per hr) 28 Stars Self Check: TOTAL COST $15,500 $14,000 $12,235 29 30 ( c) Compute the production costs (DM, DL, and Overhead applied using Activity based costing. (Show calculations in the row below) ( c) Compute the production costs (DM, DL, and Overhead applied using Activity based costing. (Show calculations in the row below) 31 Note: To apply overhead, take the actual units of the cost driver x that activity rate for each product. 32 Nerds Stars Fashions Nerds Stars Fashions 33 Direct materials Hint? Same as part b above (Feb. direct ma terial cost given in problem) Direct materials $4,000 $2,500 $2,00 34 Direct labor Hint? Same as part b above (February DL hi ours x DL cost of $15 per hour) Direct labor 1.500 1,500 1,335 35 Overhead applied: heading only - do not enter in this line Overhead applied: 36 Production setup Hint ? Actual production runs for each produ ict x activity rate for production setup from part A above (2 runs x $300 per run) (4 runs x $300 per run) ' runs x $300 per run) 37 (show calculations in this row) Production setup 600 1,200 2,400 38 Order processing Hint? Actual orders for each product x activ ity rate for order processing from part A above (8 orders x $250 per order) (4 orders x $250 per order) 39 (show calculations in this row) Order processing 2,000 2,000 1,000 40 Materials handling Hint ? Actual pounds of materials for each pi roduct x activity rate for materials handling from part A above (400 lb. x $2.50 per lb.) (200 lb. x $2.50 per lb.) 41 (show calculations in this row) Materials handling 1,000 500 500 42 Equip deprec & maint Hint? Actual machine hours for each produc t x activity rate for Equip. Deprec. and Maint. from part A (500 mach hrs x $6 per MH) 300 mach hrs x $6 per MH) 43 (show calculations in this row) Equip deprec & maint 3,000 1,800 1,800 44 Quality mangement Hint ? Actual inspections for each product xi activity rate for Quality Memt from part A above (2 inspectionas x $1,250 per inspection) 45 (show calculations in this row) Quality mangement 2,500 2,500 2,500 46 Packing and shipping Hint ? Actual units shipped for each product x activity rate for Packing and Shipping from part A above (1,000 units x $2 per unit) (500 units x $2 per unit) 20 units x $2 per unit) 47 (show calculations in this row) Packing and shipping 2,000 1,000 600 48 TOTAL COST TOTAL COST $16,600 $13,000 $12,135 49 Nerds Self Check: 50 51 (d) Analysis: See problem instructions for analysis question. (d) Analysis: See problem instructions for analysis question. A Sheet1 Sheet2 Sheet3 + + 75%