Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Marine Components produces parts for airplanes and ships. The parts are produced to specification by their customers, who pay either a fixed price (the price

image text in transcribed
Marine Components produces parts for airplanes and ships. The parts are produced to specification by their customers, who pay either a fixed price (the price does not depend directly on the cost of the job) or price equal to recorded cost plus a fixed fee (cost plus). For the upcoming year (year 2), Marine expects only two clients (client 1 and client 2). The work done for client 1 will all be done under fixed price contracts while the work done for client 2 will all be done under cost-plus contracts Manufacturing overhead for year 2 is estimated to be $10 milion. Other budgeted data for year 2 include: Machine-hours (thousands) Direct labor cost (5000) Client 2,000 $ 2,500 client 2 2,000 $ 7.500 Required: a. Compute the predetermined rate assuming that Marine Components uses machine-hours to apply overhead. (Round your answer to 2 decimal places.) Application rate per machine hour b. Compute the predetermined rate assuming that Marine Components uses direct labor cost to apply overhead. Application rate of direct labor cost References eBook & Resources

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

Students also viewed these Accounting questions