1)Blackwelder Factory produces two similar products-small lamps and desk lamps.

Question

1)Blackwelder Factory produces two similar products-small lamps and desk lamps. The total plant overhead budget is $680,000 with 511,000 estimated direct labor hours. It is further estimated that small lamp production will require 257,000 direct labor hours and desk lamp production will need 254,000 direct labor hours.

Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Blackwelder Factory allocate to desk lamp production if actual direct hours for the period is 187,000.

a.$500,630

b.$934,545

c.$248,710

d.$431,290

2)Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.

Determine the activity-based cost for each disk drive unit.

a.$756.69

b.$222

c.$18.2

d.$261.77

3)The Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below.

All of the machine hours take place in the Fabrication department, which has an estimated overhead of $87,100. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $82,700.

The Ramapo Company uses a single overhead rate to apply all overhead costs. What would the single plantwide rate be if it was based on machine hours instead of labor hours?

a.$9.17 per machine hour

b.$5.87 per machine hour

c.$7.34 per machine hour

d.$16.88 per machine hour

4)Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.

Determine the activity rate per production order for scheduling.

a.$137.51

b.$19.89

c.$244.04

d.$72.29

5)The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments—Fabrication and Assembly. Data for the products and departments are listed below.

All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $85,000. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $73,400.

The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours.

What is the overhead cost per unit for Rings?

a.$50.13

b.$52.53

c.$45.96

d.$5.57

Activity Cost
Activity Base Procurement $310,900 Number of purchase orders Scheduling $207,500 Number of production orders Materials handling $439,900 Number of moves Product development $768,300 Number of engineering changes Production $1,408,300 Machine hours
Number of
Purchase
Orders
Number of
Production
Orders
Number
of
Moves
Number of
Engineering
Changes

Machine
Hours
Number
of
Units Disk drives 4,180 360 1,220 10 1,600 1,900 Tape drives 1,600 135 510 6 10,000 3,700 Wire drives 11,300 930 4,000 28 10,800 2,400

Explanation / Answer

1. Predeterminded Overhead rate Estimated Overhead/Estimated Hours 680000/511000 $ 1.33 Overhead Allocated to Desk Hour* Rate 187000*1.33 $ 248710 2. Number of Number Number of Number Number of Production of Engineering Machine of Purchase Orders Moves Changes Hours Units Total Orders Per unit Disk drives 4,180 76087 360 52421 1,220 93661 10 174614 1,600 100593 1,900 497375 261.7765 Tape drives 1,600 29124 135 19658 510 39153 6 104768 10,000 628705 3,700 821409 222.0024 Wire drives 11,300 205689 930 135421 4,000 307086 28 488918 10,800 679002 2,400 1816116 756.7149 Total 17,080 310900 1,425 207500 5,730 439900 44 768300 22,400 1408300 3134900 3. No of Units Labor Hour per unit Machine Hour per unit Total Labor Hour Total Machine Hour Blinks 1037 2 7 2074 7259 Dlinks 1985 4 8 7940 15880 10014 23139 Overhead 82700+87100 169800 Overhead Rate 169800/23139                                7.34 4. Number of Number Number of Number Number of Production of Engineering Machine of Purchase Orders Moves Changes Hours Units Orders Disk drives 3,820 75981 410 56378         137.51 1,340 102238 13 222743 2,200 159040 2,200 616381 Tape drives 2,100 41769 165 22689         137.51 720 54934 4 68536 8,500 614474 3,800 802403 Wire drives 12,300 244650 910 125133         137.51 3,800 289928 27 462620 10,600 766285 2,400 1888617 18,220 3,62,400 1,485 2,04,200 5,860 4,47,100 44 7,53,900 21,300 15,39,800 8,400 33,07,400 Number of Production Orders 410 56378         137.51 165 22689         137.51 910 125133         137.51 5 No of Units Labor Hour per unit Machine Hour per unit Total Labor Hour Total Machine Hour Total Rings 1140 6 3 6840 3420 Dings 2020 3 9 6060 18180 12900 21600 Overheads 73400 85000 Pre Ovh Rates                          5.69                                 3.94 Rings Overhead               38,919.07                      13,458.33      52,377.40 Units 1140 Per Unit              45.95

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