Assignment
Exercise 1: (Part Level Submission) Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations.
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Standard
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Custom
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Direct labor costs
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$41,000
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$99,000
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Machine hours
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1,430
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1,330
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Setup hours
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110
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420
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Total estimated overhead costs are $304,000. Overhead cost allocated to the machining activity cost pool is $197,000, and $107,000 is allocated to the machine setup activity cost pool.
(a) Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 12.25.)
Exercise 2: (Part Level Submission)
Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $276,980 for the year, and machine usage is estimated at 125,900 hours.
For the year, $351,020 of overhead costs are incurred and 132,600 hours are used.
(a) Compute the manufacturing overhead rate for the year. (Round answer to 2 decimal places, e.g. 1.25.)
Exercise 3: (Part Level Submission) The ledger of American Company has the following work in process account.
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Work in Process-Painting
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5/1
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Balance
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3,890
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5/31
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Transferred out
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?
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5/31
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Materials
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5,840
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5/31
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Labor
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2,630
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5/31
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Overhead
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1,780
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5/31
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Balance
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?
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|
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Production records show that there were 530 units in the beginning inventory, 30% complete, 1,760 units started, and 1,540 units transferred out. The beginning work in process had materials cost of $2,440 and conversion costs of $1,450. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.
(a) How many units are in process at May 31?