Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jerome Shipyards does work for both the U.S. Navy and private shipping companies. Jerome's major business is renovating ships, which it does at one

image text in transcribedimage text in transcribedimage text in transcribed

Jerome Shipyards does work for both the U.S. Navy and private shipping companies. Jerome's major business is renovating ships, which it does at one of two company dry docks referred to by the names of the local towns: Casgrain and Lyndon. Data on operations and costs for the two dry docks follow: Overhead cost ($000) Direct labor-hours Casgrain $ 19,460 140,000 Lyndon $ 72,520 140,000 Virtually all dry dock costs consist of depreciation. The Lyndon dry dock is much newer, so the depreciation on it is much higher. Dry dock overhead is charged to jobs based on direct labor-hours for the specific dock. Jerome is about to start two jobs, one for the Navy under a cost-plus contract and one for a private shipping company for a fixed fee. Both jobs will require the same number of hours. You have been asked to prepare some costing information. Your supervisor is sure the Navy job will be done at Lyndon and the private job will be done at Casgrain. Required: a. Compute the overhead rate at the two shipyards. b. Why do you think your supervisor says that the Navy job will be done at Lyndon?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Payroll Accounting 2016

Authors: Jeanette Landin, Paulette Schirmer

2nd edition

978-1259821950, 1259821951, 1259572196, 978-1259572197

More Books

Students also viewed these Accounting questions

Question

Graph each inequality or compound inequality. 5x - y > 6

Answered: 1 week ago

Question

Jestion 10 of 15

Answered: 1 week ago

Question

What will your research ideas contribute?

Answered: 1 week ago