Managerial Accounting
7th Edition
ISBN: 9781260247886
Author: Wild
Publisher: MCG
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Textbook Question
Chapter 4, Problem 7E
Exercise 17-5 Departmental
Refer to the information in Exercise 17-4
Required
- Compute a departmental overhead rate for the molding department based on machine hours and a department overhead rate for the trimming department based on direct labor hours.
- Determine the total overhead cost assigned to each product line using the department overhead rates from required 2.
- Determine the overhead cost per unit for each product line using the department rate.
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Question Content Area
Miller Safety Equipment uses multiple production department rates to apply overhead to products. The company will allocate support department costs to production departments based on the amount of support activity
a. used by the entire production facility
b. used by the department in the prior month
c. budgeted by the department
d. used by the department
Question A6
In a process to calculate full cost for a product or service, what is the correct order of the following steps?
A
Apportion general overheads between departments
Allocate specific departmental overheads to the relevant department
Apportion service department costs to production cost centres
Total product department overheads
B
Allocate specific departmental overheads to the relevant department
Apportion general overheads between departments
Total product department overheads
Apportion service department costs to production cost centres
C
Allocate specific departmental overheads to the relevant department
Apportion general overheads between departments
Apportion service department costs to production cost centres
Total product department overheads
D
Allocate specific departmental overheads to the relevant department
Apportion service department costs to production cost centres
Apportion general overheads between departments
Total product department overheads
Textra Plastics produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and
trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming
department for this year follow. (Round "OH rate and cost per unit" answers to 2 decimal places.)
Trimming
Molding
52,000 DLH
30,500 MH
$732,000
Direct labor hours
48,000 DLH
3,600 MH
$592,000
Machine hours
Overhead costs
Data for two special-order parts to be manufactured by the company in this year follow:
Part A27C
Part X82B
Number of units
9,800 units
54,500 units
Machine hours
Molding
Trimming
5,100 MH
2,600 MH
1,020 MH
650 MH
Direct labor hours
2,150 DLH
3,500 DLH
5,500 DLH
Molding
Trimming
700 DLH
Required:
1. Compute a departmental overhead rate for the molding department based on
machine hours and a department overhead rate for the trimming department based
on direct labor hours.
Molding
Trimming
2. & 3. Determine the total…
Chapter 4 Solutions
Managerial Accounting
Ch. 4 - Prob. 1MCQCh. 4 - Prob. 2MCQCh. 4 - All of the following are examples of batch-level...Ch. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Why are overhead costs allocated to products and...Ch. 4 - What are three common methods of assigning...Ch. 4 - Why are direct labor hours and machine hours...Ch. 4 - What are the advantages of using a single plant...Ch. 4 - The usefulness of a single plant wide overhead...
Ch. 4 - What is a cost object?Ch. 4 - Explain why a single plantwide overhead rate can...Ch. 4 - Why are multiple departmental overhead rates more...Ch. 4 - Prob. 9DQCh. 4 - Prob. 10DQCh. 4 - Prob. 11DQCh. 4 - Prob. 12DQCh. 4 - Prob. 13DQCh. 4 - Prob. 14DQCh. 4 - 15. What are the four activity levels associated...Ch. 4 - Prob. 16DQCh. 4 - Prob. 17DQCh. 4 - Prob. 18DQCh. 4 - Prob. 1QSCh. 4 - Prob. 2QSCh. 4 - Prob. 3QSCh. 4 - Prob. 4QSCh. 4 - Prob. 5QSCh. 4 - Prob. 6QSCh. 4 - Prob. 7QSCh. 4 - Prob. 8QSCh. 4 - Plant wide rate method P1 A manufacturer uses...Ch. 4 - Prob. 10QSCh. 4 - Prob. 11QSCh. 4 - Prob. 12QSCh. 4 - Prob. 13QSCh. 4 - Prob. 14QSCh. 4 - Prob. 15QSCh. 4 - Prob. 16QSCh. 4 - Exercise 17-17 Identifying activity levels C3...Ch. 4 - Prob. 2ECh. 4 - Exercise 17-1 Computing Plantwide overhead rates...Ch. 4 - Prob. 4ECh. 4 - Prob. 5ECh. 4 - Prob. 6ECh. 4 - Exercise 17-5 Departmental overhead rates P2 Refer...Ch. 4 - Prob. 8ECh. 4 - Prob. 9ECh. 4 - Prob. 10ECh. 4 - Prob. 11ECh. 4 - Prob. 12ECh. 4 - Prob. 13ECh. 4 - Prob. 14ECh. 4 - Prob. 15ECh. 4 - Prob. 16ECh. 4 - Exerciser 17-14 Activity-based costing P3 A2...Ch. 4 - Prob. 18ECh. 4 - Problem 17-1A Comparing costs using ABC with the...Ch. 4 - Prob. 2PSACh. 4 - Prob. 3PSACh. 4 - Prob. 4PSACh. 4 - Prob. 5PSACh. 4 - Prob. 1PSBCh. 4 - Prob. 2PSBCh. 4 - Prob. 3PSBCh. 4 - Prob. 4PSBCh. 4 - Prob. 5PSBCh. 4 - Prob. 4SPCh. 4 - Prob. 1AACh. 4 - Prob. 2AACh. 4 - Prob. 3AACh. 4 - Prob. 1BTNCh. 4 - Prob. 2BTNCh. 4 - Accounting professionals who for private companies...Ch. 4 - Prob. 4BTNCh. 4 - Prob. 5BTNCh. 4 - Visit and observe the processes of three different...
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- (Appendix 4B) Sequential Method of Support Department Cost Allocation Refer to Exercise 4-51 for data. Now assume that Stevenson uses the sequential method to allocate support department costs to the operating divisions. General Factory is allocated first in the sequential method for the company. Required: 1. Calculate the allocation ratios for Power and General Factory. (Note: Carry these calculations out to four decimal places.) 2. Allocate the support service costs to the operating divisions. (Note: Round all amounts to the nearest dollar.) 3. Assume divisional overhead rates are based on direct labor hours. Calculate the overhead rate for the Battery Division and for the Small Motors Division. (Note: Round overhead rates to the nearest cent.)arrow_forwardJournalizing the distribution of service department costs to production departments Required: Using your solution to P4-7, prepare journal entries for the following: The distribution of the total factory overhead of $79,400 to the individual production and service departments where it originated. The distribution of the Building Maintenance overhead to the appropriate other departments. The distribution of the Factory Office overhead to the appropriate other departments.arrow_forward1.1 Overhead allocation rate (expressed to the nearest cent) of each of the two productiondepartments. 1.2 Overheads applied to each unit of the product - The secondary apportionment of Service Department M takes place according to machine hours.- Overhead allocation rates are based on labour hours.- The product spends 10 labour hours in the Department X and 5 labour hours in the Department Yarrow_forward
- Chapter 7 Which of the following journal entries would be used to record direct labor costs in a company having two processing departments (Department A and Department B)? a. Work in Process XXX XXX Salaries and Wages Payable b. Salaries and Wages Expense Salaries and Wages payable c. Work in Process-Department A Work in Process-Department B Salaries and Wages Payable d. Salaries and Wages Payable Work in Process XXX XXX XXX XXX XXX XXX XXXarrow_forwardEXERCISE 5-15 Comprehensive Activity-Based Costing Exercise L05-2, L05-3, L05-4, L05-5 Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages and salaries. Other overhead costs. Total overhead costs.. Activity Cost Pool Supporting direct labor. ... Order processing Customer support. Other Wages and salaries. . . . . . . Other overhead costs..... vollot ynsqmos silt pode noitsmolni lenonibb neupon edull porib od T $300,000 on adol 100,000A #T Activity Measure Number of direct labor-hours Number of customer orders Number of customers This is an organization-sustaining activity Supporting Direct Labor 40% 30% Order Processing $400,000 Distribution of Resource Consumption Across Activities 3210 30% 10% Customer Support 20% 20% Total Activity for the Year 20,000 DLHs 400 orders 200 customers Not applicable Senasisch Other 10% 40% Total 100% 100%arrow_forwardPlease refer to the pictures for info and questions 1 and 2. See below for question 3 format. Department Departmental Overhead Rate Standard Deluxe Hours per Unit Overhead Allocated Hours per Unit Overhead Allocated Assembly Finishing Totals $0 $0arrow_forward
- 25 What is the total overhead cost allocated to the fabrication department 26 Assuming assembly department uses direct labor hours, what is the factory overhead rate of assembly dept?arrow_forwardQuestion 13All costs related to the manufacturing function in a company are:A. Prime costB. Conversion costC. Direct costD. Product cost Question 14In job-order cost system, the use of direct materials previously purchased usually is recorded as an increase in:A. Material accountB. Factor overhead appliedC. Factor overhead accountD. Work-in-process account Question 15The wages of factory janitorial staff should be classified as: A. Period costB. Factory overhead costC. Prime costD. Direct labor costarrow_forwardDescribe the Source 01 the data for increasing Work in Process for (a) direct materials, (b) direct labor, and (c) factory overheadarrow_forward
- Overhead costs are assigned to each product based on __________________. A. the proportion of that products use of the cost driver B. a predetermined overhead rate for a single cost driver C. price of the product D. machine hours per productarrow_forwardCost Flows Consider the following independent jobs. Overhead is applied in Department 1 at the rate of 6 per direct labor hour. Overhead is applied in Department 2 at the rate of 8 per machine hour. Direct labor wages average 10 per hour in each department. Required: Fill in the missing data for each job.arrow_forwardMultiple production department factory overhead rates The management of Orange County Chrome Company, described in Problem 1A, now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows: Stamping Department 115,200 Plating Department 105,600 Total 220,800 Instructions 1. Determine the multiple production department factory overhead rates, using direct labor hours for the Stamping Department and machine hours for the Plating Department. 2. Determine the product factory- overhead costs, using the multiple production department rates in (1).arrow_forward
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