Flash Industries

Feb 3rd, 2012
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Ashford University
Course: business studies
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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 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

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Flash IndustriesQuestion 1 SolutionOverhead 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 belowDepartment ADepartment overhead Cost276,000$Direct Labor Hours30,000Overhead rate(276,000$/30,000)9.20$ phDepartment BDepartment overhead Cost480,000$Machine Hours40,000Overhead rate(480,000$/40,000)12.00$ phQuestion 2 SolutionProposed/negotiated cost summary for job# 123Cost elementDepartment ADepartment BTotalMaterial cost3,200$740$3,940SLabor costs2,544$880$3,424$Factory Overhead2,208$3,600$5,808$Total Cost7,952$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 SolutionFinal 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 belowDepartment ADepartment overhead Cost2

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