High Tech ManufacturingInc., incurred total indirect manufacturing labor costs of $540,000. The company is labor-intensive. Total labor hours during the period were 5,000. Using qualitativeanalysis, the manager and the management accountant determine that over the period the indirect manufacturing labor costs are mixed costs with only one cost driverlaborhours. They separated the total indirect manufacturing labor costs into costs that are fixed ($200,000 based on 8,600 hours oflabor) and costs that are variable ($340,000) based on the number of labor hours used. The company has estimated 7,900 labor hours during the next period.

What will be the total variable cost for the estimated 7,900 hours?

24.or Heavy ManufacturingCompany, laborhours are 50,000 and wages $148,000 at the high point of the relevantrange, and laborhours are 30,000 and wages $108,000 at the low point of the relevant range.

What is the estimated total labor costs at Heavy Manufacturing Company when 11,500 laborhours areused?

25. Corporation has one supportdepartment, EngineeringServices, and two productiondepartments, Machining and Assembly. The following data relate to the 2017 budget for the Engineering ServicesDepartment:

Practical capacity

25,000 hours

Fixed costs of the Engineering Services Department in the

13,000 labor-hour to 25,000 labor-hour relevant range

$

350,000

Budgeted usage (quantity) of engineering services labor-hours required to support the productions departments:

Machining department

5,000 hours

Assembly department

9,000 hours

Total

14,000 hours

Budgeted variable cost per engineering services labor-hour in the 13,000 labor-hour to 25,000 labor-hour relevant range

$55 per hour used

Actual usage (quantity) of engineering services labor-hours required to support the production departments:

Machining department

4,500 hours

Assembly department

8,500 hours

Total

13,000 hours

Requirement 1. Using thesingle-rate method, calculate the cost to be allocated to the Machining and Assembly Departments if the allocation rate is based on budgeted costs and budgeted quantity of Engineering Services and allocated based on actual Engineering Services hours used in each department.

Begin by determining the rate per hour used to allocate engineering services department costs to the machining and assembly departments.

Requirement 2. Using thedual-rate method, calculate the cost to be allocated to the Machining and Assembly Departments if(a) variable costs are allocated based on the budgeted variable cost per hour for actual hours used in each department and(b) fixed costs are allocated based on budgeted fixed costs per hour and the budgeted number of hours for each department.

Before completing theallocation, calculate the budgeted fixed cost rate per hour.

Requirement 3. Using thesingle-rate method, calculate the cost to be allocated to the Machining and Assembly Departments if the allocation rate is based on budgeted costs and practical capacity of the Engineering Services Department and allocated based on actual Engineering Services hours used in each department.

Begin by determining the budgetedtotal cost rate per hour.

Requirement 4. Using thedual-rate method, calculate the cost to be allocated to the Machining and Assembly Departments if(a) variable costs are allocated based on the budgeted variable cost per hour for actual hours used in each department and(b) thefixed-cost allocation rate is based on budgeted costs and practical capacity of Engineering Services Department and allocated based on budgeted Engineering Services hours used in each department.

28.The followingdata, in physicalunits, describe a grinding process forJanuary:

Work in process, beginning

18,800

Started during the current period

155,900

To account for

174,700

Spoiled units

12,100

Good units completed and transferred out

138,000

Work in process, ending

24,600

Accounted for

174,700

Inspection occurs at the100% completion stage. Normal spoilage is 5% of the good units passing inspection.

Requirement 1. Compute the normal and abnormal spoilage in units.

Requirement 2. Assume that theequivalent unit cost of a spoiled unit is $9. Compute the amount of potential savings if all spoilage wereeliminated, assuming that all other costs would be unaffected.