Reference no: EM133072072
Question 1 - Lime Corporation produces joint products Joy and Raoul, together with by-product Bae. Joy is sold at split-off, but Raoul and Bae undergo additional processing. Production information pertaining to these products follow:
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Joy
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Raoul
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Bae
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Total
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Joint Costs:
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Variable
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|
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88,000
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Fixed
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|
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148,000
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Separable Costs:
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|
|
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Variable
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120,000
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3,000
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123,000
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Fixed
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90,000
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1,000
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92,000
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Profit
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1,000
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Production (lbs.)
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50,000
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40,000
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10,000
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100,000
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Sales Price/lbs.
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$4
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7.50
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1.10
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There is no beginning or ending inventories. No materials are spoiled in production. How much is the joint cost allocated to Raoul?
Question 2 - AJ Corporation manufactures tables. The entity also does contract work for other customers and utilizes a job order costing system. The flexible budget covering next years' expected range of activity is:
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Direct Labor Hours
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50,000
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80,000
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110,000
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Machine Hours
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40,000
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64,000
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88,000
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|
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|
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Variable Overhead Costs
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$100,000
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$160,000
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$220,000
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Fixed Overhead Costs
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150,000
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150,000
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150,000
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Total Overhead Costs
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$250,000
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$310,000
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$370,000
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A predetermined overhead rate is based on direct labor hours is used to apply total overhead. Management has estimated that 100,000 direct labor hours will be used next year. At the end of the year, actual direct labor hours for the year were 112,375 hours and the actual manufacturing overhead for the year was $412,525. What amount is the over/underapplied FOH?
Question 3 - Sama Company has 3 production departments: Key, Day, and Coy. It also has 2 service departments: Administration and Personnel. Administration costs are allocated based on value of assets employed, and Personnel costs are allocated based on number of employees. Assume that Administration provides more service to the other departments than does the Personnel Department.
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Department
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Direct Costs
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Employees
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Asset Value
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Administration
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1,800,000
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50
|
900,000
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Personnel
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700,000
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20
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1,200,000
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Key
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1,400,000
|
30
|
600,000
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Day
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400,000
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10
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300,000
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Coy
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500,000
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20
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1,600,000
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Under the direct method, how much is the the factory overhead rate of the Day department if it apply overhead based on direct labor hours and budgeted direct labor hours for the period total to 75,000 hours.