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Flash Industries

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Flash Industries
Question 1 Solution
Overhead rate for department A is estimated at 9.20 $ perdirect labor hour.
Here direct labor hour is used as base to estimate overhead rate as department B is more labor
intensive.
Overhead rate for department b stands at 12.00 $ per machine hour.
Here machine hour is used as the base to estimate overhead rate as department B is more
automated.
Detailed calculation is presented below
Department A
Department overhead Cost 276,000$
Direct Labor Hours 30,000
Overhead rate(276,000$/30,000) 9.20$ ph
Department B
Department overhead Cost 480,000$
Machine Hours 40,000
Overhead rate(480,000$/40,000) 12.00$ ph
Question 2 Solution
Proposed/negotiated cost summary for job# 123
Cost element Department A Department B Total
Material cost 3,200$ 740$ 3,940S
Labor costs 2,544$ 880$ 3,424$
Factory Overhead 2,208$ 3,600$ 5,808$

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Total Cost 7,952$ 5,220$ 13,172$
Labor costs for Department A = (240*10.6) = 2,544$
Labor costs for Department B = (80*11) = 880$
Factory Overhead cost for Department A is estimated by using direct labor hour and estimated
overhead rate and stands at (9.2*240) = 2,208$
Factory Overhead cost for Department B is estimated by using Machine hour and estimated
overhead rate stands at (12*3000) = 3,600$
Question 3 Solution
Final overhead rate for Department A = 8.79$ per direct labor hour.
Final overhead rate for Department B = 12.07$ per machine hour.
Detailed calculation is presented below
Department A
Department overhead Cost 299,000$
Direct Labor Hours 34,000
Overhead rate(299,000$/34,000) 8.79$ p dlh
Department B
Department overhead Cost 495,000$
Machine Hours 41,000
Overhead rate(495,000$/41,000) 12.07$ p mh
Question 4 Solution

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Flash Industries Question 1 Solution Overhead rate for department A is estimated at 9.20 $ perdirect labor hour. Here direct labor hour is used as base to estimate overhead rate as department B is more labor intensive. Overhead rate for department b stands at 12.00 $ per machine hour. Here machine hour is used as the base to estimate overhead rate as department B is more automated. Detailed calculation is presented below Department A Department overhead Cost 276,000$ Direct Labor Hours 30,000 Overhead rate(276,000$/30,000) 9.20$ ph Department B Department overhead Cost 480,000$ Machine Hours 40,000 Overhead rate(480,000$/40,000) 12.00$ ph Question 2 Solution Proposed/negotiated cost summary for job# 123 Cost element Department A Department B Total Material cost 3,200$ 740$ 3,940S Labor costs 2,544$ 880$ 3,424$ Factory Overhead 2,208$ 3,600$ 5,808$ Total Cost 7,952$ 5,220$ 13,172$ Labor costs for Department A = (240*10.6) = 2,544$ Labor costs for Department B = (80*11) = 880$ Factory Overhead cost for Department A is estimated by using direct labor hour and estimated overhead rate and stands at (9.2*240) = 2,208$ Factory Overhead cost for Department B is estimated by using Machine hour and estimated overhead rate stands at (12*3000) = 3,600$ Question 3 Solution Final overhead rate for Department A = 8.79$ per direct labor hour. Final overhead rate for Department B = 12.07$ per machine hour. Detailed calculation is presented below Department A Department overhead Cost 2 ...
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