Figure 4-10 The Manoli Company has collected the following data for use in calcu
ID: 2403003 • Letter: F
Question
Figure 4-10
The Manoli Company has collected the following data for use in calculating product costs:
Activity Data: (expected and actual)
rug cleaners sweepers total
units produced 100,000 250,000 350,000
prime costs $200,000 $584,000 $784,000
direct labor hours 10,000 40,000 50,000
machine hours 20,000 10,000 30,000
number of setups 25 75 100
inspection hours 1,600 2,400 4,000
number of moves 140 160 300
Departmental Data: (expected and actual)
molding assembly total
direct labor hours
rug cleaners 5,000 5,000 10,000
sweepers 5,000 35,000 40,000
total 10,000 40,000 50,000
machine hours
rug cleaners 17,000 3,000 20,000
sweepers 3,000 7,000 10,000
total 20,000 10,000 30,000
overhead costs
machining $130,000 $ 40,000 $170,000
moving materials 50,000 40,000 90,000
setting up 80,000 20,000 100,000
inspecting products 30,000 40,000 70,000
total 290,000 $140,000 $430,000
25. Refer to Figure 4-10. Manoli Company uses departmental overhead rates: Molding uses machine hours and Assembly uses labor hours. What is the unit product cost for sweepers if departmental overhead rates are used?
A) 3.50
B) 8.50
c) 2.59
D)1.40
26. Refer to Figure 4-10. What are the consumption ratios for rug cleaners and sweepers respectively for the inspection of products activity?
a) 3;7
b) 2:8
c)4:6
d) 67: 33
27. Refer to Figure 4-10. What are the consumption ratios for rug cleaners for the departments on the basis of the departmental drivers (molding; assembly)?
a) .33, .87
b) .85, .125
c) .33, .25
d) .85, .5
Figure 4-10
The Manoli Company has collected the following data for use in calculating product costs:
Activity Data: (expected and actual)
rug cleaners sweepers total
units produced 100,000 250,000 350,000
prime costs $200,000 $584,000 $784,000
direct labor hours 10,000 40,000 50,000
machine hours 20,000 10,000 30,000
number of setups 25 75 100
inspection hours 1,600 2,400 4,000
number of moves 140 160 300
Departmental Data: (expected and actual)
molding assembly total
direct labor hours
rug cleaners 5,000 5,000 10,000
sweepers 5,000 35,000 40,000
total 10,000 40,000 50,000
machine hours
rug cleaners 17,000 3,000 20,000
sweepers 3,000 7,000 10,000
total 20,000 10,000 30,000
overhead costs
machining $130,000 $ 40,000 $170,000
moving materials 50,000 40,000 90,000
setting up 80,000 20,000 100,000
inspecting products 30,000 40,000 70,000
total 290,000 $140,000 $430,000
Explanation / Answer
Solution 25:
Predetermined overhead rate of Molding = Estimated overhead / Estimated machine hours
= $290,000 / 20000 = $14.50 per machine hour
Predetermined overhead rate of assembly = Estimated overhead / Estimated direct labor hours
= $140,000 / 40000 = $3.50 per labor hours
Solution 26:
Consumption ratio of rug cleaners and sweepers respectively for the inspection of products activity = Consumption ratio of inspection hours = 1600 : 2400 = 4:6
Hence option c is correct.
Solution 27:
Consumption ratio of rug cleaner for the department on basis fo departmental drivers
Modling = Nos of machine hours for rug cleaner / Total machine hours = 17000/20000 = 0.85
Assembly = Nos of labor hours for rug cleaner / Total labor hours = 5000 / 40000 = 0.125
Hence option b is correct.
Computation of Unit Product cost - Sweeper Particulars Amount Prime cost $584,000.00 Overhead - Molding (3000*$14.50) $43,500.00 Overhead - Assembly (35000*$3.50) $122,500.00 Total cost $750,000.00 Nos of units 250000 Cost per unit $3.00Related Questions
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