Everlast Co. manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $660,000 payroll for 8,600 direct labor-hours. Listed below is cost driver information used in the product-costing system: Overhead Cost Pool Budgeted Overhead Cost Driver Estimated Cost Driver Level Machine setups $ 310,000 # of setups 310 setups Materials handling 115,800 # of barrels 9,650 barrels Quality control 1,290,000 # of inspections 3,000 inspections Other overhead cost 1,075,000 # of machine hours 21,500 machine hours Total overhead $ 2,790,800 A current product order has the following requirements: Machine setups 28 setups Materials handling 720 barrels Quality inspections 90 inspections Machine hours 1,700 machine hours Direct labor hour 564 hours Using ABC, how much total overhead is assigned to the order?
Answers
Answer:
Total overheads assigned to order = $203,621.36
Explanation:
As for the information provided:
Payroll = = $76.74 per hour
Setups = = $1,000 per setup
Material Handling = = $12 per barrel.
Quality Control = $430 per inspection.
Other overhead = = $50 per machine hour.
Details of current product requirement: And the related expense shall be :
28 setups = 28 $1,000 = $28,000
720 barrels = 720 $12 = $8,640
90 inspections = 90 $430 = $38,700
1,700 machine hours = 1,700 $50 = $85,000
564 labor hours = 564 $76.74 = $43,281.36
Total overheads assigned to order = $203,621.36
Related Questions
Marshall Officer is a stockholder in Endrun Investments, which is organized as a C Corporation. Endrun recently lost a major court decision and will probably be forced into bankruptcy. In fact, the damages awarded are so great that, even if all of its assets are sold and the proceeds are used to pay its debts, Endrun is likely to still owe money to its creditors. If Endrun does go bankrupt, Marshall and the other stockholders will___________
Frankenstein Enterprises received two notes from customers for sales that Frankenstein made in 2013. The notes included:Note A: Dated 5/31/2013, principal of $ 132,000and interest due 3/31/2014.Note B: Dated 7/1/2013, principal of $220,000 and interest at 8% annually, due on 4/1/2014.Frankenstein had accrued interest receivable from these notes of $16,000 in its 12/31/2013 balance sheet. What is the annual interest rate on Note A?a) 8.00%b) 9.35%c) 9.95%d) 9.65%
Earnings available to common shareholders are defined as net profitsSelect one:a. after taxes.b. after taxes minus preferred dividends.c. after taxes minus common dividends.d. before taxes.
Simon has net investment income of $38,000 and MAGI of $223,000 and files as a single taxpayer. Simon's additional Medicare tax is:______________
Answers
Explanation:
The journal entries are shown below:
On July 15:
Purchase A/c Dr $97,020
To Accounts payable $97,020
(By buying goods on credit with discount), the following are shown in the estimates of tire sales following application of the discount:
= Number of tires × price per tire - discount rate
= 2,200 tires × $45 - 2%
= $99,000 - $1,980
= $97,020
On July 23:
Account payable A/c Dr $97,020
To Cash A/c $97,020
(Being payment is made)
On August 15:
Account payable A/c Dr $97,020
Interest expense A/c Dr $1,980
To Cash A/c $99,000
(Being payment is made on late interval)
Answers
Final answer:
The question seeks the computed depreciation for a machine for 5 years under three methods: straight-line, units-of-production, and double-declining balance. The computations were conducted using the provided data.
Explanation:
To answer this question, we first need to understand the terms constant that would be used throughout the computation: Machine cost, residual value, useful life, and productive life. In this scenario, the calculation would be as follows:
- Straight-line method: Depreciation per year = (Cost - Residual value) / Useful life. So, ($1,567,500 - $82,500) / 5 = $297,000. Your depreciation expense is $297,000 per year for 5 years.
- Units-of-production method: Depreciation per unit = (Cost - Residual value) / Productive life. Our depreciation per unit is ($1,567,500 - $82,500) / 300,000 = $4.95. To get yearly depreciation, this needs to be multiplied by the number of units produced each year.
- Double-declining-balance method: Depreciation = 2 * Straight-line rate * Remaining book value. The first year’s depreciation would be 2/5 * (Machine cost - accumulated depreciation), and for the following years, subtract the previous year's depreciation from the machine cost.
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Final answer:
Straight-line depreciation distributes the cost equally across the useful lifespan. The units-of-production method bases depreciation on the amount of production output. The double-declining balance method is an accelerated depreciation method that doubles the straight-line rate and uses the remaining book value for its calculations.
Explanation:
The cost of the machine is $1,567,500, and the residual value at the end of five years would be $82,500. Hence, the depreciable amount would be ($1,567,500 - $82,500) = $1,485,000.
For each of the desired methods, the depreciation schedules would be as follows:
- Straight-line Method: This method would equally spread the depreciable amount over the useful life of the asset. Each year, the company would depreciate ($1,485,000/5) = $297,000.
- Units-of-Production Method: This method bases the depreciation on the number of units produced. The depreciation rate per unit is calculated as ($1,485,000/300,000) = $4.95/unit. So, for each year, we need to multiply the rate by the units produced to obtain the annual depreciation.
- Double-Declining-Balance Method: For this method, we first calculate the straight-line depreciation rate, which in this case is (1/5 = 20%). We double that rate to get the accelerated depreciation rate of 40%. Each year, we multiply this rate by the book value at the beginning of the year to get the annual depreciation. However, in the final year, this method ensures that the residual value is observed.
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Answers
Answer: = $168
Explanation:
Destin Company had a $1,000 income in 2014 but also a temporary difference of $160.
This means that they were taxed on the income less the temporary difference.
= 1,000 - 160
= $840
Tax Expense = 840 * 20%
= $168
Analyze the inventory accounts to determine:
1. Cost of raw materials purchased during the year.
2. Cost of goods manufactured for the year.
3. Cost of goods sold for the year.
4. Cost of raw materials purchased during the year.
Answers
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
True Fit incurred total manufacturing costs of $24.500.000. Of this amount. $3,000,000 was direct materials used and $16, 800,000 was direct labor. Beginning balances for the year were Raw Materials Inventory. $900,000. Work-in-Process Inventory. $600,000; and Finished Goods Inventory. $1, 300,000. At the end of the year, balances were Raw Materials inventory. $800,000; Work-in-Process Inventory. $1, 700,000; and Finished Goods inventory. $390,000.
1) Raw material used= beginning inventory + purchases - ending inventory
3,000,000= 900,000 + purchases - 800,000
2,900,000= purchases
2) cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 600,000 + 24,500,000 - 1,700,000= $23,400,000
3) COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory
COGS= 1,300,000 + 23,400,000 - 390,000= $24,310,000
Product: XV-1
Descriptions Quantity Cost Rate Subtotal Total
Direct materials
Aluminum 4 pounds $25/pound $100
PVC 1 pound 40/pound 40
Direct labor 5 hours 40/hour 200
Variable factory overhead 5 hours 12/hour 60
Total variable manufacturing cost $400
Fixed factory overhead 5 hours 24/hour 120 120
Standard manufacturing cost per unit $520
Standard variable selling and administrative cost per unit I pound 50
* Budgeted fixed factory overhead cost = $120,000
Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit 14.5. In a given month, the company used 3,470 pounds of aluminum to manufacture 935 units. The company paid $28.90 per pound during the month to purchase aluminum. At the beginning of the month, the company had 54 pounds of aluminum on hand. At the end of the month, the company had only 34 pounds of aluminum in its warehouse. Schmidt used 4,400 direct labor hours during the month, at an average cost of $41.90 per hour.
Required:
Compute for the month the following variances:
1. The purchase-price variance for aluminum. Indicate whether this variance is favorable (F) or unfavorable (U).
2. The usage variance for aluminum. Indicate whether this variance is favorable (F) or unfavorable (U).
3. The direct labor rate variance. Indicate whether this variance is favorable (F) or unfavorable (U).
4. The direct labor efficiency variance. Indicate whether this variance is favorable (F) or unfavorable (U).
Answers
Answer:
See below
Explanation:
1. Purchase price variance
Standard price per pound = $25
Actual price per pound = $28.9
Quantity of aluminium purchased = Closing inventory + Quantity used - Opening inventory
= 34 + 3,470 - 54
= 3,450 pounds
Purchase price variance = (Standard price - Actual price) × Quantity purchased
= ($25 - $28.9) × 3,450
= -$3.9 × 3,450
= $13,455 (U)
2. Usage variance
Standard quantity of Aluminium for actual production
= 935 units × 4 pounds each
= 3,740 pounds
Usage variance = (Standard quantity of material used - Actual quantity used) × Standard price per unit
= (3,740 - 3,470) × $25
= 270 × $25
= $6,750 (F)
3. Direct labor rate variance
= (Standard rate per hour - Actual rate per hour)
× Actual hours for production
= ($40 - $41.9) × 4,400
= -$1.9 × 4,400
= $8,360 (U)
4. Efficiency variance
Standard hours for actual production
= 935 units × 5 per hour
=4,675 hours
Labor efficiency variance = (Standard hours for actual production - Actual hours for actual production) × Standard rate per hour
= (4,675 - 4,400) × $40
= 275 × $40
= $11,000 (F)
Answers
Answer:
4.76% and 0.5
Explanation:
The computation is shown below:
Average borrowing rate is
= Cost of debt capital ÷ (1 - tax rate)
= 3% ÷ (1 - 0.37)
= 4.76%
And, the market beta is
Cost of equity = Risk free rate of return + Beta × (Market risk premium - risk free rate of return)
5% = 2.5% + Beta × 5%
So, the beta is 0.5
The (Market risk premium - risk free rate of return) is also known as market risk premium
Final answer:
The average pre-tax borrowing rate for Abbott Laboratories is 4.8%. The market beta cannot be calculated without additional information.
Explanation:
The computations for the average pre-tax borrowing rate and market beta for Abbott Laboratories (NYSE: ABT) require different approaches. The estimate provided in the question, 3.0%, is an after-tax cost of debt capital so to find the pre-tax cost of debt, we need to adjust this rate for the tax impact. You would use the formula: pre-tax cost of debt = after-tax cost of debt / (1 - tax rate). Plugging the given values in, we get:
3.0% / (1 - 0.37) = 4.76%,
rounded to 4.8%.
As for the market beta, additional information would be needed that was not provided in the question, such as the covariance of ABT's stock return with the return on the overall market, and the variance of the market's return. Because of this, the market beta cannot be calculated with the provided information. This underlines the importance of clear and detailed information in solving financial analysis problems.
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