Ignore the requirements i just need the blanks filled in #5 which refer to #6 i have attached
7. In an Activity Based Costing Systen, overhead is allocated to each job from each cost pool and totaled. Driver units' statistics are accumulated for each 1' oh and they are listed in the table below. Complete the table below for the following requirements. For each job, determine the total overhead applied by adding the costs allocated from each pool. (Support, Batch Setups, Product Sustaining and Gueral Factory}. Note: Use the activity rates calculated in 5b). Round costs to the nearest whole dollar. BY92 -_ Design 1 .59 Batch Setups $711.45: Material Handling 20 $6 116 .6 \"PM\" General Factory Total DH Applied ST 18 _ 645.17 ABC J oh lCosting: Complete the Jobs Report here using the directions below. lock-Ii]; Company Job ABC N28 BYSIZ ZF14 Sales Revenue $70,999.16 $53,249.37 $35,499.53 Job Costs: Direct Material Direct Labor Overhead om 8 Total Job Costs Gross Margin Gross Margin% %usedbyj0b mm h) Factory Overhead; Use the 55% of direct labor dollars and calculate the overhead as it w0uld be applied using a plantwide predetermined rate. Include the amounts in the Jobs Report above for Overhead Cost. Job N28 Job BY92 Job 21:14 DL per job mm Calculated in 65 bottom 'venin connect FOH .- \"ob 3388 EII Calculate multi. i) Determine the total job costs by adding DM, DL and OH for each job in the Jobs Report above. (Add DM, DL and OH together). j) Sales Revenue: Using leckIjtefsaverage markup rate (showing 2 decimal places) (calculated in 3d) in the table below (yellow cells). Use this markup rate to estimate the sales revenue for each of the 3 jobs. Job Jvzs Job BY92 Job m4 Total Job Costs -IEE.I Calculated in 6d Cost-Plus Markuu Rate Calculated in 3d Sales Revenue er Job 70999.16 53249.37 35499.53 Cateutate mufti k) Calculate gross margin for each job in the Jobs Report below. Note: Gross Margin equals Sales Revenue minus total job costs. 1) Calculate Gross Margin percent as gross margin divided by sales revenue in the Jobs Report below. In) Compare the Gross Margin percentages for these three jobs with the company's overall gross margin percent calculated in 3c above. Why are the percentages in this table different from the percent in Be? Should Lock-litebe concerned with the accuracy of the overhead applied to each job? How does this effect the Jobs Report created above? Explain why in 30 to 50 words. e) Overhead is becoming a bigger and bigger cost component of Lock-m products. The vice president has indicated the company has had a difficult time applying overhead because of the complexity of their products. Products tend to have a higher number of components that require more costly material handling and designing. Which method do you think would be best for Lock-lite to use to apply overhead? Traditional plant-wide overhead rate using direct labor dollars, hours, machine hours, or ABC method? Support your answer by incorporating observations from the calculations in 5) and 6). Answer with complete sentences using between 30 and 50 words. ABC method would be better to use. Because muses a more specic rate which is easier to analyze. Therefore, ABC method would be better to use. 6. To better understand the impact of the applying overhead for their job costing facility, Lock-m wants to analyze a few of its larger jobs using both their traditional (percent of direct labor dollars) versus the ABC method. Lock-Mthree largest jobs during the year were, N28, BY92 and ZFl4. Use the calculations in a) through g) below to complete the Jobs Report here. Use whole dollar amounts except for Gross Margin % Sales Revenue From 62) Job Costs: Direct Material Start here in 6a) Direct Labor From 6b) Overhead From 66) Total Job CoststOGS DM+DL+0H Gross Margin Sales - COGS Gross Margin % I:I:I:|] GM/Sales 0 Direct Material: Job JV 28 used 8% of the company's Direct Material (amount from JE 1b), Job BY92 used 6% and Job ZF 14 used 4% the company's Direct Material. Use these percentages and calculate the Direct Material for each job. The combined total for the three jobs WILL NOT agree to the total costs because Lock-m has other jobs they sold as well as jobs that are still in inventory. Include these amounts in the Jobs Report above. 144000 144000 144000 ---EE_ g) Direct Labor: 8% of the company's actual Direct Labor costs were spent on Job JVZS. Job BY92 and ZF14 each used 3% and 2%, respectively. Use these percentages and calculate the Direct Material for each job. Include these amounts in the table above. JobJVZS mm mm Total DL 154000 Required information [The following information applies to the questions displayed below] The following information is available for LockTite Company, which produces specialorder security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $25,000 $ 43,000 Work in process 9,900 19,200 Finished goods 51,000 34,400 Activities and information for May Raw materials purchases (paid with cash) 171,000 Factory payroll (paid with cash) 200,000 Factory overhead Indirect materials 9,000 Indirect labor 46,000 Other overhead costs 114,000 Sales (received in cash) 1,600,000 Predetermined overhead rate based on direct labor cost 55% [ 5) Assume Lock-Tite has been asked to bid a job, Job VP07, for a customer. Lock-Tite's engineers estimate this job will be one of the most complex jobs they have ever manufactured. It is estimated to require 48 different materials costing $8,500, about 1,500 machine hours and 10 different batch set ups. Direct labor is expected to cost $12,200 for the entire job. a) Calculate the overhead costs that would be applied to Job VP07 assuming the predetermined overhead rate of 55% of direct labor costs was used. b) Use your activity rates calculated in 6 above with the given estimated drivers for Job VP07 to calculate the overhead to be applied using ABC. Job VP07 Estimated Activity Rate OH Costs unit description Cost Pool driver Units |(from 6 above) (units x rate) Design # of Jobs Batch Setups 10 # of set ups Material Handling 48 # of materials Inspection 250 # of units General Factory ,500 Total OH Applied c) Determine the estimated total job costs under both overhead methods in the table below. Lock-Tite Bid Proposal for Job VP07 Costs using 55% OH rate Costs using ABC Direct Material 3,500 8,500 Direct Labor 12,200 12,200 Overhead Total Costs MARKUP rate from 3d Proposed bid Price )Assume the same price MARKUP rate as determined in 3d, calculate the "proposed bid price" under each method by multiplying the "total costs" for each column by the markup rate from. e) Which bid price should they propose to the customer? Why? Explain your answer using full sentences and 30 to 50 words.d) 3 D) Many job costing companies, use cost-plus pricing, where they "markup" their total costs to set the prices quoted to customers. Prices are sometimes adjusted for job complexity and customers are occasionally charged for cost over-run (when they are identified). We can determine the average "markup" rate from Lock-Tite's income statement as: MARKUP equals sales revenue divided by unadjusted Cost of Goods Sold. Calculate Lock-Tite Company's Cost- Plus Mark-Up rate. Show 2 decimal places. You will use this later in the project. Sales divided by Unadi. COGS Cost-Plus Markup Rate 1,600,000 474,300 = 3.37
