with the cooperation of the cost accounting manager for the mill and each plant's controller, she gathered the following data for last year: Sawmill: 3oint manufacturing costs: $900,000 Quantity Produced Price at Split-off Grade (board feet) (per 1,000 board foot) Firsts and seconds 1,500,000 $300 No. 1 common 3,000,000 225 No. 2 common 1,875,000 140 No. 3 common 1,125,000 100 Total 7,500,000 w Fabric Plant: Budgeted overhead: $1,200,000 (50% fixed) Practical volume (direct labor hours): 120,000 hours Actual overhead: $1,150,000 (50% fixed) Actual hours worked: Weaving and Coloring and Grade Pattern Bolting Total Fabric FB60 20.000 12.000 32.000 Fabric Plant: Budgeted overhead: $1,200,000 (50% fixed) Practical volume (direct labor hours): 120,000 hours Actual overhead: $1,150,000 (50% fixed) Actual hours worked: Weaving and coloring and Pattern Bolting Grade Total Fabric FB60 20,000 12,000 32,000 Fabric FB70 28,000 14,000 42,000 Fabric FB80 26,000 18,000 44,000 Total 74,000 44,000 118,000 Departmental data on Fabric FB70 (actual costs and actual outcomes): Weaving and Coloring and Pattern Bolting Beginning inventories Units 20,000 400 Costs: Transferred in $0 $100,000 Weaving and Coloring and Pattern Bolting 20,000 400 Beginning inventories Units Costs: Transferred in Materials Labor $0 $100,000 $80,000 $8,000 $18,000 $6,600 Overhead $22,000 $9,000 > 80,000 ? 80,000 Current production: Units started Units transferred out Costs: Transferred in Materials 3,200 $0 ? $320,000 $82,000 N Labor $200,000 $99,400 Overhead ? Percentage completion: Beainnina Inventory 30% 40% Percentage completion Beginning inventory 30 Ending inventory 40 50 Units are measured in yards for the Weaving and Pattern Department and in bolts for the Coloring and Bolting Department. Note: With the exception of the cardboard bolt rods, materials are added at the beginning of each process. The cost of the rods is relatively insignificant and is included in overhead Proposed standard cost sheet for Fabric FB70 (for the Coloring and Bolting Department only): Transferred-in materials (25 yards s10 $250.00 Other materials (100 ounces $0.20) 20.00 Labor (3.1 hours 53) 24 BD Fixed overhead (3.1 hours $5) Variable overhead (3.1 hours 55 15.50 Standard cost per unit $325.00 Furniture Plant Departmental data (budgeted): Service Departments Producing Departments General Furniture Plant: Departmental data (budgeted) Service Departments Producing Departments General Receiving Power Maintenance Factory Cutting Assembly Overhead $450,000 $600,000 $300.000 $525,000 $750,000 $375,000 Machine hours 50,000 15,000 Receiving orders 13,500 9,000 Square feet 1,000 5,000 4,000 15,000 10.000 Direct labor hours 50,000 200,000 After some discussion with the furniture plant controller Gisele decided to use machine hours to calculate the overhead rate for the Cutting Department and direct labor hours for the Assembly Department rate the cutting Department was more automated than the Assembly Department). As part of her report, she wanted to compare the effects of plantwide rates and departmental rates on the cost of jobs. She wanted to know if overhead costing could be the source of the pricing problems the company was experiencing To assess the effect of the different overhead assignment scedures, Giel decided to examine two prospective jobs. One job, Job ASCO, could produce soo sofas, using a frequently requested style and Fabric FB70. Bids on this type of job were being lot more frequently to competitors. The second job, Jab 575, would produce 75 specially designed reciners. This job involved a new design and was more difficult for the workers to build. It involved some special cutting requirements and an unfamiliar sembly. Recently, the company seemed to be winning more bids on jobs of this type. To compute the costs of the two jobs, Gisela assembled the following information on the job Job A500: Direct materials: Fabric FB70 Lumber (No. 1 common) Other components 180 bolts @ $350 20,000 board feet a $0.12 $26,600 Direct labor: Cutting Department Assembly Department 400 hours a $10 1,600 hours a $8.75 Machine time: Cutting Department Assembly Department 350 machine hours 50 machine hours Job B75: Direct materials: Fabric FB70 26 yards @ $350 Lumber (first and seconds) 2,200 board feet @ $0.12 Other components $3,236 Direct labor: Job B75: Direct materials: Fabric FB70 26 yards @ $350 Lumber (first and seconds) 2,200 board feet @ $0.12 Other components $3,236 Direct labor: Cutting Department 70 hours @ $10 Assembly Department 240 hours @ $8.75 Machine time: Cutting Department 90 machine hours Assembly Department 15 machine hours 9. Calculate the following overhead rates for the furniture plant: (1) plantwide rate and (2) departmental rates. Use the direct method for assigning service conts to producing departments. Round your answers to two decimal places Rate Plantwide rate per DLH Cutting department per Assembly department per DLH 10. Por each of the overhead rates computed in Requirement 9. calculate unit bid prices for Jobs Asco and B7s. Round your answers to two decimal places Unit Bid Prantwide rates Jon 4500 Job 575 Departmental rates Job A500 Job B75 Assume that the company's aggressive bidding policy is unit cost plus 50 percent. Did departmental overhead rates have any effect on Beauville's winning or losing bids? What recommendation would you make? Explain, Round your answers to two decimal place. Departmentni rates decrease the bid for the more easily produced Job A500 and increase the bid for the more difficult to produce Job B75. This appears to be in the right direction. We would recommend using the departmental ratas Now, adjust the costs and bids for departmental rate bids using the proposed standard costs for the Coloring and Bolting Department, Old this make a difference? What does this tell you? Round your answers to two decimal places Enter all amounts as positive numbers Standard cost would decrease the cost of Fabric FB70 for both jobs. For Job A500, prime costs will decrease by And for Job 875, prime costa will decrease by Thus, the bid for Job A500 will decrease by Similarly, the bid for Job 375 will decrease by $ This tells us that we can apparently avaad including waste in our bid by using standard costs and improve our bidding. It also tells us that we need to focus on becoming more effident. with the cooperation of the cost accounting manager for the mill and each plant's controller, she gathered the following data for last year: Sawmill: 3oint manufacturing costs: $900,000 Quantity Produced Price at Split-off Grade (board feet) (per 1,000 board foot) Firsts and seconds 1,500,000 $300 No. 1 common 3,000,000 225 No. 2 common 1,875,000 140 No. 3 common 1,125,000 100 Total 7,500,000 w Fabric Plant: Budgeted overhead: $1,200,000 (50% fixed) Practical volume (direct labor hours): 120,000 hours Actual overhead: $1,150,000 (50% fixed) Actual hours worked: Weaving and Coloring and Grade Pattern Bolting Total Fabric FB60 20.000 12.000 32.000 Fabric Plant: Budgeted overhead: $1,200,000 (50% fixed) Practical volume (direct labor hours): 120,000 hours Actual overhead: $1,150,000 (50% fixed) Actual hours worked: Weaving and coloring and Pattern Bolting Grade Total Fabric FB60 20,000 12,000 32,000 Fabric FB70 28,000 14,000 42,000 Fabric FB80 26,000 18,000 44,000 Total 74,000 44,000 118,000 Departmental data on Fabric FB70 (actual costs and actual outcomes): Weaving and Coloring and Pattern Bolting Beginning inventories Units 20,000 400 Costs: Transferred in $0 $100,000 Weaving and Coloring and Pattern Bolting 20,000 400 Beginning inventories Units Costs: Transferred in Materials Labor $0 $100,000 $80,000 $8,000 $18,000 $6,600 Overhead $22,000 $9,000 > 80,000 ? 80,000 Current production: Units started Units transferred out Costs: Transferred in Materials 3,200 $0 ? $320,000 $82,000 N Labor $200,000 $99,400 Overhead ? Percentage completion: Beainnina Inventory 30% 40% Percentage completion Beginning inventory 30 Ending inventory 40 50 Units are measured in yards for the Weaving and Pattern Department and in bolts for the Coloring and Bolting Department. Note: With the exception of the cardboard bolt rods, materials are added at the beginning of each process. The cost of the rods is relatively insignificant and is included in overhead Proposed standard cost sheet for Fabric FB70 (for the Coloring and Bolting Department only): Transferred-in materials (25 yards s10 $250.00 Other materials (100 ounces $0.20) 20.00 Labor (3.1 hours 53) 24 BD Fixed overhead (3.1 hours $5) Variable overhead (3.1 hours 55 15.50 Standard cost per unit $325.00 Furniture Plant Departmental data (budgeted): Service Departments Producing Departments General Furniture Plant: Departmental data (budgeted) Service Departments Producing Departments General Receiving Power Maintenance Factory Cutting Assembly Overhead $450,000 $600,000 $300.000 $525,000 $750,000 $375,000 Machine hours 50,000 15,000 Receiving orders 13,500 9,000 Square feet 1,000 5,000 4,000 15,000 10.000 Direct labor hours 50,000 200,000 After some discussion with the furniture plant controller Gisele decided to use machine hours to calculate the overhead rate for the Cutting Department and direct labor hours for the Assembly Department rate the cutting Department was more automated than the Assembly Department). As part of her report, she wanted to compare the effects of plantwide rates and departmental rates on the cost of jobs. She wanted to know if overhead costing could be the source of the pricing problems the company was experiencing To assess the effect of the different overhead assignment scedures, Giel decided to examine two prospective jobs. One job, Job ASCO, could produce soo sofas, using a frequently requested style and Fabric FB70. Bids on this type of job were being lot more frequently to competitors. The second job, Jab 575, would produce 75 specially designed reciners. This job involved a new design and was more difficult for the workers to build. It involved some special cutting requirements and an unfamiliar sembly. Recently, the company seemed to be winning more bids on jobs of this type. To compute the costs of the two jobs, Gisela assembled the following information on the job Job A500: Direct materials: Fabric FB70 Lumber (No. 1 common) Other components 180 bolts @ $350 20,000 board feet a $0.12 $26,600 Direct labor: Cutting Department Assembly Department 400 hours a $10 1,600 hours a $8.75 Machine time: Cutting Department Assembly Department 350 machine hours 50 machine hours Job B75: Direct materials: Fabric FB70 26 yards @ $350 Lumber (first and seconds) 2,200 board feet @ $0.12 Other components $3,236 Direct labor: Job B75: Direct materials: Fabric FB70 26 yards @ $350 Lumber (first and seconds) 2,200 board feet @ $0.12 Other components $3,236 Direct labor: Cutting Department 70 hours @ $10 Assembly Department 240 hours @ $8.75 Machine time: Cutting Department 90 machine hours Assembly Department 15 machine hours 9. Calculate the following overhead rates for the furniture plant: (1) plantwide rate and (2) departmental rates. Use the direct method for assigning service conts to producing departments. Round your answers to two decimal places Rate Plantwide rate per DLH Cutting department per Assembly department per DLH 10. Por each of the overhead rates computed in Requirement 9. calculate unit bid prices for Jobs Asco and B7s. Round your answers to two decimal places Unit Bid Prantwide rates Jon 4500 Job 575 Departmental rates Job A500 Job B75 Assume that the company's aggressive bidding policy is unit cost plus 50 percent. Did departmental overhead rates have any effect on Beauville's winning or losing bids? What recommendation would you make? Explain, Round your answers to two decimal place. Departmentni rates decrease the bid for the more easily produced Job A500 and increase the bid for the more difficult to produce Job B75. This appears to be in the right direction. We would recommend using the departmental ratas Now, adjust the costs and bids for departmental rate bids using the proposed standard costs for the Coloring and Bolting Department, Old this make a difference? What does this tell you? Round your answers to two decimal places Enter all amounts as positive numbers Standard cost would decrease the cost of Fabric FB70 for both jobs. For Job A500, prime costs will decrease by And for Job 875, prime costa will decrease by Thus, the bid for Job A500 will decrease by Similarly, the bid for Job 375 will decrease by $ This tells us that we can apparently avaad including waste in our bid by using standard costs and improve our bidding. It also tells us that we need to focus on becoming more effident