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Falmouth Aquatics manufactures swimming pool equipment. Falmouth estimates total manufacturing overhead costs next year to be $2,200,000. The company also estimates it will use 48,000
Falmouth Aquatics manufactures swimming pool equipment. Falmouth estimates total manufacturing overhead costs next year to be $2,200,000. The company also estimates it will use 48,000 direct labour hours and incur $960,000 of direct labour cost next year. In addition, the machines are expected to be run for 37,500 hours. Compute the predetermined manufacturing overhead rate for next year under the following independent situations: 1. Assume that Falmouth uses direct labour hours as its manufacturing overhead allocation base. 2. Assume that Falmouth uses direct labour cost as its manufacturing overhead allocation base. 3. Assume that Falmouth uses madiine hours as its manufacturing allocation base. 1. Identify the formula and compute the predetermined manufacturing overhead rate for next year using direct labour hours as the manufacturing overhead allocation base. (Round your answer to the nearest whole dollar. Abbreviations used: DL = Direct Labour.) Predetermined manufactunng \\ ll overhead rate Edmonton Aquatics manufactures swimming pool equipment. Edmonton estimates the following manufacturing overhead rates using different independent situations: a (Click the icon to view the rates.) Determine the total manufacturing overhead allocated to Edmonton's manufacturing jobs in the following independent situations: 1. Assume that Edmonton actually used 51,300 direct labour hours. 2. Assume that Edmonton actually incurred $1 ,019,500 of direct labour cost. 3. Assume that Edmonton actually ran the machines 46,500 hours. 4. Briey explain what you have leamed about the total manufacturing overhead allocated to production. 1. Determine the total manufacturing overhead allocated to Edmonton's manufacturing jobs, assuming that Edmonton actually used 51,300 direct labour hours. (Round your answer to the nearest whole dollar.) Enter the formula and compute the total manufacturing overhead allocated to Edmonton's manufacturing jobs it 51,300 direct labour hours were actually used. Manufacturing overhead allocated Data table x H Estimated manufacturing Estimated quantity Predetermined overhead costs of allocation base overhead rate Direct labour hours $ 2,500,000 46,800 $ 53 per DL hour Direct labour dollars 2,500,000 $ 1,002,000 250% of DL cost Machine hours 2,500,000 40,000 $ 63 per MH Voisine Aquatics manufactures swimming pool equipment. Determine the total overallocation or underallocation of manufacturing overhead during the year. Actual manufacturing costs for the year totalled $2,325,000. (Click the icon to view data.) 1. Assume that Voisine used direct labour hours as the allocation base. 2. Assume that Voisine used the direct labour cost as the allocation base. 3. Assume that Voisine used machine hours as the allocation base 4. Were there any situations in which jobs were costed correctly? If not, when were they overcosted? When were they undercosted? 1. Determine the total overallocation or underallocation of manufacturing overhead assuming that Voisine used direct labour hours as the allocation base. Manufacturing overhead is by $. - X Data table Manufacturing Total manufacturing overhead rate Actual use overhead allocated Direct labour hours $ 73 32,400 $ 2,365,200 Direct labour dollars 220% $ 1,030,000 2,266,000 Machine hours $ 92 32,650 $ 3,003,800Thompson manufactures wooden backyard playground equipment. Thompson estimated $1,890,000 of manufacturing overhead and $2,300,000 of direct labour cost for the year. After the year was over, the amounting records indicated that the company had actually incurred $1,750,000 of manufacturing overhead and $2,250,000 of direct labour cost. 1. Calculate Thompson's predetermined manufacturing overhead rate assuming that the company uses direct labour cost as an allocation base. 2. How much manufacturing overhead would have been allocated to manufacturing jobs during the year? 3. At yearend, was manufacturing overhead overallocated or underallocated? By how much? (Hint: Use a T-account to aid your analysis.) 1. Calculate Thompson's predetermined manufacturing overhead rate assuming that the company uses direct labour cost as an allocation base, (Round the percentage to two decimal places, X.XX%.) Predetennined manufacturing / = overhead rate Gabe's Gadgets produces LCD touch-screen products. The company reports the following information at December 31' Gabe's Gadgets began operations 11 months before, on January 31. Work in Process Wages Manufacturing Finished Goods Raw Materials Inventory Payable Overhead Inventory Inventory 31,000 124,000 79,000 1,500 57,000 124,000 115,500 55,000 32,500 60,000 19,000 57,000 41,000 muiremenls Requirements Requirement 1. What is the cost of direct materials used? What is the cost of direct materials used? What is the cost of indirect materials used? What is the cost of direct labour? What is the cost of indirect labour? What is the cost of goods manufactured? The cost of direct materials used is $ 99PF'N.' What is the cost of goods sold (before adjusting for any under or overallocated manufacturing overhead)? 7. What is the actual manufacturing overhead? 8. How much manufacturing overhead was allocated to jobs? 9. What is the predetermined manufacturing overhead rate as a percentage of direct labour cost? 10. Is manufacturing overhead underallocated or overallor:ated'.7 By how much
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