Reference no: EM132715624
Ray Manufacturing has four categories of overhead. The four categories and the expected overhead costs for each category for next year are as follows:
Maintenance $510,000
Materials handling $250,000
Setups $ 60,000
Inspection $210,000
- Currently, overhead is applied using traditional costing method based on budgeted direct labor hours. Next year budgeted total overhead is $1,030,000 and budgeted machine hours is 60,000 hours.
- The company has been asked to submit a bidding price for a proposed job. The plant manager feels that obtaining this job would result in new business opportunities in future years. Usually bids are based upon full manufacturing cost plus 10 percent mark up.
Estimates for the proposed job are as follows:
Direct materials $30,000
Direct labor (8,000 hours) $24,000
Number of materials moves 100 moves
Number of inspections 120 inspections
Number of setups 24 set ups
Number of machine hours 4,000 machine hours
The plant manager has heard of a new way of applying overhead that uses cost pools and cost drivers. Expected activity for the four activity-based cost drivers that would be used are as follows:
Machine hours 60,000 Mhrs
Material moves 2,000 moves
Setups 1,000 setups
Quality inspections 5,000 inspections
Problem 1: If Ray Manufacturing used traditional costing method by using machine hours as the cost driver, the total cost of the proposed job would be _____________
A. $122,667
B. $112,400
C. $106,400
D. $136,400
|
Why abc costing method is preferred over the traditional
: What are the reason(s) discussed during online lecture class, why ABC costing method is preferred over the traditional costing method in apportioning
|
|
Determine how many units of each product it produced
: A machine requires four hours to make a unit of Product X and three hours to make a unit of Product Y. Last month the machine operated for 103 hours producing.
|
|
Find what the total cost of the proposed job would be
: If Ray Manufacturing used activity-based costing (ABC) method to assign overhead, the total cost of the proposed job would be?
|
|
What the total overhead applied to the proposed job would be
: If Ray Manufacturing used activity-based costing (ABC) method to assign overhead, the total overhead applied to the proposed job would be?
|
|
What the total cost of the proposed job would be
: If Ray Manufacturing used traditional costing method by using machine hours as the cost driver, the total cost of the proposed job would be
|
|
What the overhead applied to the proposed job would be
: If Ray Manufacturing used traditional costing method by using machine hours as the cost driver, the overhead applied to the proposed job would be
|
|
What the total costs of units transferred from department x
: What the total costs of units transferred from Department X for the month of July were? (materials100%, conversion 80%) 2,000
|
|
What department x total costs of ending work in process
: What Department X total costs of ending work in process at the end of July were? Started new in production during July 20,000
|
|
What is the effective annual rate
: You plan to invest $2,000 in an (IRA) today that pays a stated annual interest rate of 8.0% percent, which is expected to apply to all future years.
|