Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Little Bob's Custom Tables produces expensive custom tables with intricate inlay. The primary customers of the firm are wealthy individuals and corporations that want large

image text in transcribed
Little Bob's Custom Tables produces expensive custom tables with intricate inlay. The primary customers of the firm are wealthy individuals and corporations that want large fancy tables for their Board Room. Little Bob's uses a job order costing system to determine product cost in its labor intensive manufacturing facility. The company has two cost pools -materials handling overhead (MHOH) and production overhead (POH). Little Bob has decided to use budgeted direct materials cost as the allocation base for MHOH and budgeted direct labor cost to allocate POH. 1. Calculate the predetermined overhead rate for Materials Handling Overhead per year: 2. Calculate the predetermined overhead rate for Production Overhead per year: Two possible customers have approached Little Bob's for custom tables - Intel Corporation and the Emir of Burundi. Based on the specifications, the company estimator estimates that Intel's table will have $37,000 direct materials cost and $18,000 direct labor costs. The estimator estimates that the Emir's table $10,000 and $17,000 for direct materials and direct labor, respectively. Using the predetermined overhead rates above, calculate the standard cost for each of the tables. (Note that sales price is ultimately 150% of standard cost.) 3. The cost for Intel's Table: 4. The cost for the Emir's Table: What will happen if the overhead allocation was wrong and the products are over priced? Under priced

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

GAO Financial Audit Manual Volume 2 Updated March 2021

Authors: United States Government GAO

2021 Edition

B091WM9DZW, 979-8733082875

More Books

Students also viewed these Accounting questions

Question

6. Identify seven types of hidden histories.

Answered: 1 week ago

Question

What is the relationship between humans and nature?

Answered: 1 week ago