Question

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Walnut Systems produces two different products, Product A, which sells for $124 per unit, and Product B, which sells for $196 per unit, using three different activities: Design, which uses Engineering Hours as an activity driver; Machining, which uses machine hours as an activity driver; and Inspection, which uses number of batches as an activity driver. The cost of each activity and usage of the activity drivers are as follows:    

	Cost		Usage by Product A			Usage by Product B
Design (Engineering Hours)	$	132,729		382			504
Machining (Machine Hours)	$	232,267		1,984			3,312
Inspection (Batches)	$	88,089		365			641

Determine the indirect costs assigned to Product A.

Round your final answer to the nearest dollar. (Do not round any intermediate calculations, only the final answer)

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Parker Company makes custom chef aprons. Parker has the following costs in its manufacturing company related to labor.

Wages paid to seamstresses	$12,873
Wages paid to sales team	15,473
Wages paid to cutters	11,766
Wages paid to the seamstress supervisor	16,721
Office manager’s salary	18,050
Sales Commissions	5,260

What are Parker Company's direct labor costs?

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Solo Manufacturing company applies manufacturing overhead on the basis of machine hours. At the beginning of the year, the company estimated its total overhead cost to be $157,400 and machine hours to be 10,400. Actual manufacturing overhead was $113,200 and actual machine hours was 9,900.

Compute the applied manufacturing overhead.

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Amy Andrews is a CPA who works as a managerial accounting consultant for a variety of firms. To determine her hourly rate, Amy uses a cost-plus pricing system, which she updates each year.

The hourly cost of her assistant (including taxes and benefits) is $13, the hourly cost of her office space is $3, the hourly cost of her marketing and other overhead materials is $3, and Amy's own hourly salary (including taxes and benefits) is $84. Amy adds a 20% premium to her costs.

What is her hourly rate using a cost-plus pricing strategy? Round your answer to the nearest dollar.

Answer 1

	Walnut Systems:
	Cost driver rate
			Cost	Total quantity of cost driver	Cost driver rate
			a	b	a/b
	Design		132729	886	149.8069977	Per engineering hour
				(382+504)
	Machining		232267	5296	43.85706193	Per machine hour
				(1984+3312)
	Inspection		88089	1006	87.56361829	Per inspection
				(365+641)
	Indirect costs assigned to Product A:
		Cost driver rate	Usage by Product A	Costs assigned
		a	b	a*b
	Design	149.807	382	57226.27314
	Machining	43.85706	1984	87012.41088
	Inspection	87.56362	365	31960.72068
	Total			176199
	Indirect costs assigned to Product A=$ 176199
	Parker Company:
	Direct labor cost=Wages paid to seamstresses=$ 12873
	Solo Manufacturing company:
	Applied manufacturing overhead=Predetermined overhead rate*Actual machine hours
	Predetermined overhead rate=Estimated total overhead cost/Estimated machine hours=157400/10400=$ 15.13462 per hour
	Applied manufacturing overhead=15.13462*9900=$ 149833
	Amy Andrews:
	Hourly rate:
					$
	Cost of assistant				13
	Cost of office space				3
	cost of marketing and other overhead materials				3
	Own hourly salary				84
	Total cost				103
	Add:Premium at 20%				20.6
	Hourly rate				124