Question
Overhead Rates, Unit Costs Xanning Company manufactures specialty tools to customer order. There are three producing departments. Departmental information on budgeted overhead and various activity
-
Overhead Rates, Unit Costs
Xanning Company manufactures specialty tools to customer order. There are three producing departments. Departmental information on budgeted overhead and various activity measures for the coming year is as follows:
Welding Assembly Finishing Estimated overhead $200,000 $22,000 $250,000 Direct labour hours 4,500 10,000 6,000 Direct labour cost $90,000 $150,000 $120,000 Machine hours 5,000 1,000 2,000
Currently, overhead is applied on the basis of machine hours using a plantwide rate. However, Janine, the controller, has been wondering whether it might be worthwhile to use departmental overhead rates. She has analyzed the overhead costs and drivers for the various departments and decided that welding and finishing should base their overhead rates on machine hours and that assembly should base its overhead rate on direct labour hours.
Janine has been asked to prepare bids for two jobs with the following information:
Job 1 Job 2 Direct materials $4,500 $8,600 Direct labour cost $1,000 $2,000 Direct labour hours: Welding 10 20 Assembly 60 20 Finishing 30 80 Number of machine hours: Welding 50 30 Assembly 40 5 Finishing 110 165
The typical bid price includes a 30 percent markup over full manufacturing cost.
Required:
1. Calculate a plantwide rate for Xanning Company based on machine hours. $fill in the blank 1 per machine hour
What is the bid price of each job using this rate? If required, round your answers to the nearest dollar.
Bid price Job 1 $fill in the blank 2 Job 2 $fill in the blank 3
2. Calculate departmental overhead rates for the producing departments. If required, carry your answers out to the nearest cent.
Welding overhead rate $fill in the blank 4 per machine hour Assembly overhead rate $fill in the blank 5 per direct labour hour Finishing overhead rate $fill in the blank 6 per machine hour
What is the bid price of each job using these rates? If required, round your answers to the nearest dollar.
Bid price Job 1 $fill in the blank 7 Job 2 $fill in the blank 8
-
Overhead Rates, Unit Costs
Xanning Company manufactures specialty tools to customer order. There are three producing departments. Departmental information on budgeted overhead and various activity measures for the coming year is as follows:
| Welding | Assembly | Finishing | ||||
| Estimated overhead | $200,000 | $22,000 | $250,000 | |||
| Direct labour hours | 4,500 | 10,000 | 6,000 | |||
| Direct labour cost | $90,000 | $150,000 | $120,000 | |||
| Machine hours | 5,000 | 1,000 | 2,000 | |||
Currently, overhead is applied on the basis of machine hours using a plantwide rate. However, Janine, the controller, has been wondering whether it might be worthwhile to use departmental overhead rates. She has analyzed the overhead costs and drivers for the various departments and decided that welding and finishing should base their overhead rates on machine hours and that assembly should base its overhead rate on direct labour hours.
Janine has been asked to prepare bids for two jobs with the following information:
| Job 1 | Job 2 | |||
| Direct materials | $4,500 | $8,600 | ||
| Direct labour cost | $1,000 | $2,000 | ||
| Direct labour hours: | ||||
| Welding | 10 | 20 | ||
| Assembly | 60 | 20 | ||
| Finishing | 30 | 80 | ||
| Number of machine hours: | ||||
| Welding | 50 | 30 | ||
| Assembly | 40 | 5 | ||
| Finishing | 110 | 165 | ||
The typical bid price includes a 30 percent markup over full manufacturing cost.
Required:
1. Calculate a plantwide rate for Xanning Company based on machine hours. $fill in the blank 1 per machine hour
What is the bid price of each job using this rate? If required, round your answers to the nearest dollar.
| Bid price | |
| Job 1 | $fill in the blank 2 |
| Job 2 | $fill in the blank 3 |
2. Calculate departmental overhead rates for the producing departments. If required, carry your answers out to the nearest cent.
| Welding overhead rate | $fill in the blank 4 per machine hour |
| Assembly overhead rate | $fill in the blank 5 per direct labour hour |
| Finishing overhead rate | $fill in the blank 6 per machine hour |
What is the bid price of each job using these rates? If required, round your answers to the nearest dollar.
| Bid price | |
| Job 1 | $fill in the blank 7 |
| Job 2 | $fill in the blank 8 |
Check My Work
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Accounting
Authors: John Stittle, Robert Wearing
1st Edition
1412935024, 9781412935029
