Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wood Co. prepares high quality timber for use in specialized projects. Wood Co. has two departments: Planing and Sanding. Wood Co. uses Direct Labor Hours

image text in transcribed
image text in transcribed
Wood Co. prepares high quality timber for use in specialized projects. Wood Co. has two departments: Planing and Sanding. Wood Co. uses Direct Labor Hours as its cost driver. Information for Wood Co. is given below. Overhead costs are $2,500,000 total, with $1,800,000 in Planing. Total hours in Planing are 400,000, and sanding uses 100,000 DL hours. Job 101 uses 6,000 hours of Planing and 4,000 Hours of Sanding. Direct Materials in Job 101 are $1,000,000 and Labor is paid $20 per hour worked Required: Calculate Total Costs Allocated to Job 101 using Departmental Rates. Company is in the business of producing custom luxury interior closets. Costs related to the process are related to three departments: Fabrication, Machining, and Assembly. The cost drivers for the factory and the departments is Direct Materials (DM) Dollars. The activities identified for allocation are machine setups, wood processing, transportation costs, and process cleanup. The activity level drivers for each of these are number of setups, board-feet of wood, number of units produced, and number of jobs. Total MoH is $4,000,000. The MoH is $1,600,000 in Fabrication, $1,400,000 in Machining, and $1,000,000 in Assembly. Machine Setups is allocated Moh of $300,000, Wood Processing is allocated $2,900,000, Transportation costs are allocated $200,000, and Process cleanup is allocated $600,000, DM used in Fabrication is $7,000,000, DM in Machining is $2,000,000, and DM in Assembly is $1,000,000 Total Direct Labor costs are $6,000,000, and Total Direct Materials costs are $10,000,000. Company is expecting to process 60 jobs during the period, 150 machine setups, will produce 500 units, and will take 1,500,000 board feet of wood. Job 55 will produce 10 custom closets and will require $150,000 in Direct Materialsand $100,000 in Direct Labor. The job will take 3 machine setups and will use 66,000 board feet of wood. $80,000 of materials are used in Fabrication, $20,000 are used in machining, and $10,000 are used in Assembly REQUIRED: Using Activity Based Costing, determine how much overhead should be allocated to Job 55

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

Recommended Textbook for

IRS Audit Protection And Survival Guide Trucking Industry

Authors: Daniel J. Baran, Gerald F. Bernard, James E. Brown

1st Edition

0471166413, 978-0471166412

More Books

Students also viewed these Accounting questions

Question

c. What were you expected to do when you grew up?

Answered: 1 week ago

Question

4. Describe how cultural values influence communication.

Answered: 1 week ago

Question

3. Identify and describe nine cultural value orientations.

Answered: 1 week ago