Question
Question #3 The lead accountant has compiled the following data in preparation for allocating overhead to three cost drivers. Overhead Costs Utilities Admin/MGMT Factory Costs
Question #3 The lead accountant has compiled the following data in preparation for allocating overhead to three cost drivers. Overhead Costs Utilities Admin/MGMT Factory Costs
Which of the three methods causes the Final Product Cost of Widget-3 to exceed $800? SHOW CALCULATIONS. In 30 words or less, why did this occur?\
| Utilities | $110,000 | Utilities (phone, electric, water, gas, etc.) | ||
| Admin/MGMT | $520,000 | CEO, VPs, Supervisors, Secretary staff costs | ||
| Factory Costs | $870,000 | Building lease & equipment |
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| TOTAL OVERHEAD | $1,500,000 |
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| Labor Hrs Per Widget | Direct Labor Cost per Widget | Std Labor Rate ($/hr): | $30.00 |
| Widget-1 | 4 | $120.00 |
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| Widget-2 | 8 | $240.00 |
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| Widget-3 | 16 | $480.00 |
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| Drivers |
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| Units Produced in Factory (all inclusive) | 45,000 | Widget-1 | 25,000 | units per month |
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| Widget-2 | 15,000 | units per month |
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| Widget-3 | 5,000 | units per month |
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| Direct Labor Hours | 300,000 | Widget-1 | 100,000 | hours per month |
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| Widget-2 | 120,000 | hours per month |
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| Widget-3 | 80,000 | hours per month |
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| Raw Material Costs | $25.00 | per unit of Widget-1 |
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| $50.00 | per unit of Widget-2 |
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| $200.00 | per unit of Widget-3 |
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Enterprise Compliance Risk Management An Essential Toolkit For Banks And Financial Services
Authors: Saloni Ramakrishna
1st Edition
1118550285, 978-1118550281
