Cutting Department Sewing Department Total Estimated total Direct Labor hours (DLh) 12,000 51,000 63,000 Estimated total Machine hours (Mh) 19,500 3,900 23,400 Estimated Variable OH $150,000 $259,000 $409,000 Estimated Fixed OH $825,000 $404,000 $1,229,000 Champaign Cheetah order: Cutting Department Sewing Department Total Direct materials $240 $30 $270 Direct labor $30 $345 $375 Actual Direct Labor hours (DLh) used 3 21 24 Actual Machine hours (Mh) used 5 1 6
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To find the total estimated overhead costs, you need to add the estimated variable overhead costs to the estimated fixed overhead costs. According to the data provided: Estimated Variable Overhead (OH) = $409,000 Estimated Fixed Overhead (OH) = $1,229,000 Total Show more…
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Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct material: 5 pounds at $9.00 per pound $ 45.00 Direct labor: 3 hours at $14 per hour 42.00 Variable overhead: 3 hours at $8 per hour 24.00 Total standard variable cost per unit $ 111.00 The company also established the following cost formulas for its selling expenses: Fixed Cost per Month Variable Cost per Unit Sold Advertising $ 340,000 Sales salaries and commissions $ 380,000 $ 26.00 Shipping expenses $ 17.00 The planning budget for March was based on producing and selling 28,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs: Purchased 180,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production. Direct laborers worked 69,000 hours at a rate of $15.00 per hour. The total variable manufacturing overhead for the month was $565,110. Total advertising, sales salaries and commissions, and shipping expenses were $345,000, $525,000, and $255,000, respectively. 1.What raw materials cost would be included in the company’s flexible budget for March? 2. What is the materials quantity variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.) 3. What is the materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.) 4. If Preble had purchased 184,000 pounds of materials at $8.50 per pound and used 180,000 pounds in production, what would be the materials quantity variance for March? 5. If Preble had purchased 184,000 pounds of materials at $8.50 per pound and used 180,000 pounds in production, what would be the materials price variance for March? 6. What direct labor cost would be included in the company’s flexible budget for March? 7. What is the direct labor efficiency variance for March? 8. . What is the direct labor rate variance for March? 9. What variable manufacturing overhead cost would be included in the company’s flexible budget for March? 10. What is the variable overhead efficiency variance for March?
Akash M.
5 Identify the number of emergency procedures, patient load, and administrative costs, for each month within the relevant range. 6 Construct an Excel spreadsheet, and use regression analysis to estimate: (a) an equation with patient load predicting administrative cost, within the relevant range. (b) the clinic's administrative cost during the month when 800 patients visit the hospital. (c) an equation with both activities—patient load and the number of emergency procedures—predicting administrative cost, within the relevant range. (d) the clinic's administrative cost during the month when 800 patients visit the hospital and there are 12 emergency procedures using the equations from part c. 7 Does the inclusion of the additional cost driver of 'emergency procedures' improve the model? Explain your answer. 8 How confident should McDonough be about the three cost models (high-low, simple regression and multiple regression) that she has developed? Explain your answer. C3.42 Interpreting regression analysis; activity-based costing: service firm LO3.9 Greenscape Pty Ltd provides commercial landscaping services. Linda Drake, the firm's owner, wants to develop cost estimates that she can use to prepare bids on jobs. After analysing the firm's costs, Drake has developed the following preliminary cost estimates for each 1000 square metres of landscaping: Direct materials $400 Direct labour (5 direct labour hours @ $19 per hour) 95 Overhead (@ $18 per direct labour hour) 90 Total cost per 1000 square metres $585 Drake is quite certain about the estimates for direct materials and direct labour, but she is not as comfortable with the overhead estimate. As indirect costs, overhead costs cannot be traced directly to landscaping. Instead, Drake has used a common method of estimating an overhead rate per direct labour hour. However, the estimate for overhead is based on the overhead costs that were incurred during the past 12 months, as presented in the following schedule. The estimate of $18 per direct labour hour was determined by dividing the total overhead costs for the 12-month period ($648 000) by the total direct labour hours (36 000). Month Total overhead Regular direct labour hours Overtime direct labour hours* Total direct labour hours January $ 54 000 2 910 190 3 100 February 47 000 2 380 20 2 400 March 48 000 2 210 40 2 250 April 56 000 2 590 210 2 800 May 57 000 3 030 470 3 500 June 65 000 3 240 760 4 000
Sri K.
P10-8 Break-even analysis The production of a new product required Zion Manufacturing Co. to lease additional plant facilities. Based on studies, the following data have been made available: Estimated annual sales—24,000 units Estimated costs: Materials: $96,000 | $4.00 Direct labor: 14,400 | .60 Factory overhead: 24,000 | 1.00 Administrative expense: 28,800 | 1.20 Total: $163,200 | $6.80 Selling expenses are expected to be 5% of sales, and net income is to amount to $2.00 per unit. Required: 1. Calculate the selling price per unit. (Hint: Let "X" equal the selling price and express selling expense as a percentage of "X.") 2. Prepare an absorption costing income statement for the year ended December 31, 2016. 3. Calculate the break-even point expressed in dollars and in units, assuming that administrative expense and factory overhead are all fixed but other costs are fully variable.
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