Question

The following selected data were taken from the accounting records of Manitoba Manufacturing Company. The company...

The following selected data were taken from the accounting records of Manitoba Manufacturing Company. The company uses direct-labor hours as its cost driver for overhead costs.
  Month Direct-Labor
Hours		 Manufacturing
Overhead
  January 24,000       $ 750,250
  February 23,000       724,000
  March 26,000       778,500
  April 21,000       685,000
  May 28,000       781,500
  June 30,000       883,000

June’s costs consisted of machine supplies ($123,000), depreciation ($24,500), and plant maintenance ($735,500). These costs Exhibit the following respective behavior: variable, fixed, and semivariable.

     The manufacturing overhead figures presented in the preceding table do not include supervisory
labor cost, which is step-fixed in nature. For volume levels of less than 15,000 hours, supervisory labor amounts to $69,500. The cost is $139,000 from 15,000–29,999 hours and $208,500 when activity
reaches 30,000 hours or more.
Required:
1.

Determine the machine supplies cost and depreciation for April.

         

2.

Using the high-low method, calculate the variable cost per direct-labor hour and fixed cost per month for the Company’s plant maintenance cost. (Round your variable cost per direct-labor hour to 2 decimal places.)

         

3.

Assume that present cost behavior patterns continue into the latter half of the year. Estimate the total amount of manufacturing overhead the company can expect in October if 28,300 direct-labor hours are worked.

         

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Machine Supplied cost per Labor hour = 123000/30,000 = $4.1 per hour

Hence, machine supplies cost for April = $4.1*21000 = $86,100

Depreciation is a fixed cost and hence, will remain same as $24,500

2.Plant Maintenance cost in April = 685000 – 86100 – 24500 = $574,400

Variable cost per hour for plant maintenance cost = Difference in cost/Difference in hours

= (735500 – 574,400)/(30,000-21,000)

= $17.90 per Direct labor hour

Fixed cost per month = Total cost – variable cost

= 735500 – 30,000*17.90

= $198,500

3. Total manufacturing costs will be as under:

Machine supplies 4.1*28300 = $116,030

Depreciation = $24,500

Plant Maintenance 17.90*28300 + 198500 = $705,070

Supervisory labor cost = $139,000

Total manufacturing costs = $984,600

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The following selected data were taken from the accounting records of Colorado Enterprises: Month Machine Hours...
The following selected data were taken from the accounting records of Colorado Enterprises: Month Machine Hours Manufacturing Overhead May 48,500 $ 914,000 June 61,000 1,140,000 July 73,000 1,327,500 August 54,500 985,000 Manufacturing overhead consists of three different costs; (1) machine supplies (variable), (2) property taxes (fixed), and (3) plant maintenance (semivariable). July's overhead costs were $173,000 for machine supplies, $24,500 for property taxes, and $1,130,000 for plant maintenance. Required: A. Determine the machine supplies and property taxes for May. B....
Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following....
Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following. Units to be produced (by quarters): 10,200, 12,100, 15,000, 16,700. Direct labor: Time is 1.6 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.90; indirect labor $1.30; and maintenance $0.60. Fixed overhead costs per quarter: supervisory salaries $36,280; depreciation $18,600; and maintenance $15,000. Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal...
Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following....
Atlanta Company is preparing its manufacturing overhead budget for 2017. Relevant data consist of the following. Units to be produced (by quarters): 10,400, 12,100, 14,200, 17,000. Direct labor: Time is 1.5 hours per unit. Variable overhead costs per direct labor hour: indirect materials $0.70; indirect labor $1.30; and maintenance $0.70. Fixed overhead costs per quarter: supervisory salaries $36,850; depreciation $17,390; and maintenance $14,220. Prepare the manufacturing overhead budget for the year, showing quarterly data. (Round overhead rate to 2 decimal...
The following data were taken from the records of Griggs Company for December: Administrative expenses $100,800...
The following data were taken from the records of Griggs Company for December: Administrative expenses $100,800 Cost of goods sold (at standard) 550,000 Direct materials price variance-unfavorable 1,680 Direct materials quantity variance-favorable (560) Direct labor rate variance-favorable (1,120) Direct labor time variance-unfavorable 490 Variable factory overhead controllable variance-favorable (210) Fixed factory overhead volume variance-unfavorable 3,080 Interest expense 2,940 Sales 868,000 Selling expenses 125,000 Required: Prepare an income statement for presentation to management. Refer to the list of Labels and Amount...
Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press...
Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 13,000 hours of productive capacity in the department: Variable overhead cost:    Indirect factory labor $93,600    Power and light 5,720    Indirect materials 35,100       Total variable overhead cost $134,420 Fixed overhead cost:    Supervisory salaries $47,050    Depreciation of plant and equipment 29,570    Insurance and property taxes 18,820       Total fixed overhead cost 95,440 Total factory...
Accounting pls Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department...
Accounting pls Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 11,000 hours of productive capacity in the department: Variable overhead cost:    Indirect factory labor $106,700    Power and light 3,850    Indirect materials 34,100       Total variable overhead cost $144,650 Fixed overhead cost:    Supervisory salaries $50,630    Depreciation of plant and equipment 31,820    Insurance and property taxes 20,250       Total fixed overhead cost 102,700 Total factory overhead...
The cutting department of Morgan Manufacturing Company operated during June 2017 with the following manufacturing overhead...
The cutting department of Morgan Manufacturing Company operated during June 2017 with the following manufacturing overhead cost budget based on 10,000 hours of monthly productive capacity: Cutting Department Overhead Budget (10,000 hours) For the Month of June 2017 Variable costs: Factory supplies…………………………......$200,000 Indirect labor……………………………………304,000 Utilities (usage charge)………….……….. 136,000     Total variable overhead………………… $640,000 Fixed costs: Supervisory salaries………………………… $320,000 Factory insurance…………………………… 64,000 Utilities (base charge)…………………….. 160,000     Total fixed overhead………………....... $544,000 Total manufacturing overhead…......... $1,184,000 The cutting department was operated for...
Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press...
Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 11,000 hours of productive capacity in the department: Variable overhead costs:    Indirect factory labor $106,700    Power and light 4,400    Indirect materials 29,700       Total variable overhead cost $140,800 Fixed overhead costs:    Supervisory salaries $49,280    Depreciation of plant and equipment 30,980    Insurance and property taxes 19,710       Total fixed overhead cost 99,970 Total factory...
Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press...
Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 16,000 hours of productive capacity in the department: Variable overhead costs:    Indirect factory labor $152,000    Power and light 7,200    Indirect materials 46,400       Total variable overhead cost $205,600 Fixed overhead costs:    Supervisory salaries $71,960    Depreciation of plant and equipment 45,230    Insurance and property taxes 28,780       Total fixed overhead cost 145,970 Total factory...
Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press...
Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 16,000 hours of productive capacity in the department: Variable overhead costs:    Indirect factory labor $137,600    Power and light 5,600    Indirect materials 35,200       Total variable overhead cost $178,400 Fixed overhead costs:    Supervisory salaries $62,440    Depreciation of plant and equipment 39,250    Insurance and property taxes 24,980       Total fixed overhead cost 126,670 Total factory...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT