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Norwegian Cruise liners uses job order cost to determine the costs of the ships it produces. During the year 2014 it worked on 4 different
Norwegian Cruise liners uses job order cost to determine the costs of the ships it produces. During the year 2014 it worked on 4 different types of ships, Family Fun, Romantic Travels, Executive Class, and Luxury Liners. The company has determined that machine hours are the best predictor of FOH costs. All 4 ships were completed before the end of the year and costs incurred on each ship by the end of 2014 are as follows: Family Fun Romantic Travels Executive Class Luxury Liners DM $46,000,000 $54,000,000 $82,000,000 $97,000,000 DL $22,000,000 $33,000,000 $45,000,000 $62,000,000 FOH costs for Norwegian Cruise liners in 2013 were $148,000,000 and a total of 1,600,000 machine hours were used. FOH costs for Norwegian Cruise liners in 2014 were $162,500,000. Norwegian Cruise liners used the following # of machine hours to complete each ship in 2014: Family Fun Romantic Travels Executive Class Luxury Liners Machine Hours 200,000 350,000 475,000 650,000 Questions: 1. Calculate the pre-determined FOH rate for Norwegian Cruise liners 2. Determine the amount of FOH applied for the year 2014 for Norwegian Cruise liners 3. Determine the amount of overapplied or underapplied factory overhead for 2014 4. Prepare the adjusting journal entry 5. Determine the unit cost of producing each of the 4 ships
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