a newconnect.mheducation.com nework Smythe Co. makes furniture. The following da
ID: 2394553 • Letter: A
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a newconnect.mheducation.com nework Smythe Co. makes furniture. The following data are taken from its production plans for the year Direct labor costs Hazardous waste disposal costs $5,870,000 630,000 Expected production Direct labor hours required Hazardous vaste disposed 211,000 units 254,000 DLH 17,000 units 16,400 DLH 200 pounds 800 pounds Required: s waste disposal cost per unit for chairs and for tables if costs are assigned using a rate based o le plantwide o $ per direct Units Produced OH Cost per Product Total Overhead Cost Oniverlabor h 0.00 $ 0.00 S Chairs Tables 2. Determine h waste disposal costs per unit for chairs and for tables if costs are assigned based on number of pounds disposed of. Activity Driver Units OH Cost per Produced Product OH $ per pound Total Overhead Cost unit Chairs 0.00 S 0.00 S TablesExplanation / Answer
Answer 1. Predetermined Overhead Rate = $630,000 (Waste Disposal Costs) / 270,400 DLH (Allocation Base) Predetermined Overhead Rate = $2.33 per DLH (Approx.) Product Activity Driver OH $ per DLH Total Overhead Cost Units Produced OH Cost per Unit Chairs 254,000 DLH 2.33 591,789.94 211,000 2.80 Tables 16,400 DLH 2.33 38,210.06 17,000 2.25 Answer 2. Predetermined Overhead Rate = $630,000 (Waste Disposal Costs) / 1,000 Pounds (Allocation Base) Predetermined Overhead Rate = $630 per pound (Approx.) Product Activity Driver OH $ per Pound Total Overhead Cost Units Produced OH Cost per Unit Chairs 200 pounds 630.00 126,000.00 211,000 0.60 Tables 800 pounds 630.00 504,000.00 17,000 29.65 Answer 3. Assignment based on number of pounds
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