Question

McArthur Company has gathered the following data related to its production process of two of its...

McArthur Company has gathered the following data related to its production process of two of its products for the week ended April 30:

Model Item #B200 Item #C440
Quantity produced 60 100
Unit-related material costs $ 42,000 $ 100,000
Variable conversion costs 72,000 300,000
Total direct costs $ 114,000 $ 400,000
Indirect costs:
Indirect manufacturing costs 163,200 272,000
Indirect operating costs 255,000 425,000
Total indirect costs 418,200 697,000
Total costs $ 532,200 $ 1,097,000

The costs above that appear to be allocated rather than traced are:

  • Unit-related material costs.

  • Variable conversion costs.

  • Indirect manufacturing costs only.

  • All indirect costs.

Homework Answers

Answer #2

The correct answer is

All indirect costs

Explanation

Total indirect cost for both items

= 418200 + 697000

= 1115200

Now we will allocate this cost based on number of units

Cost allocated to item B 200 = total indirectcost * no. of unit oof B 200 / total units

= 1115200 * 60/(60+100)

= $ 418200

Cost allocated to item C 440 = total indirectcost * no. of unit of C440 / total units

= 1115200 * 100/(60+100)

= $ 697000

The allocated cost matches with the total indirect cost in cost statment, so it means cost has been allocated. So the correct answer is

All indirect Costs.

answered by: anonymous
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The Sanding Department of Kaiden Company has the following production and cost data for November. Production...
The Sanding Department of Kaiden Company has the following production and cost data for November. Production 1. Started and completed 8,400 units. 2. Started 2,900 units that are 70% completed at November 30. Costs Beginning work in process $-0- Materials 51,980 Labor 114,730 Manufacturing Overhead 41,720 Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process. Kaiden Company uses the FIFO method to compute equivalent units. Compute unit costs and show the assignment...
The Sanding Department of Kaiden Company has the following production and cost data for November. Production...
The Sanding Department of Kaiden Company has the following production and cost data for November. Production 1. Started and completed 9,700 units. 2. Started 3,100 units that are 80% completed at November 30. Costs Beginning work in process $-0- Materials 55,680 Labor 121,800 Manufacturing Overhead 48,720 Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process. Kaiden Company uses the FIFO method to compute equivalent units. (a) Determine the equivalent units of production...
1- The accounting records of Diego Company revealed the following costs, among others: Direct Material                         &nb
1- The accounting records of Diego Company revealed the following costs, among others: Direct Material                              85,000 Indirect Material 12,000 Factory depreciation 42,000 Indirect Labor                             8,500 Utilities Manufacturing O.H 3,700 Costs that would be considered in the calculation of manufacturing overhead total: Select one: a. 151,200 b. 24,200 c. 66,200 d. 15,700 2- At a volume of 50,000 units, Dries reported sales revenues of OMR 1,000,000, variable costs of OMR 300,000, and fixed costs of OMR 140,000. The company's contribution margin...
The Painting Department of Y Manufacturing Company has the following production and manufacturing cost data for...
The Painting Department of Y Manufacturing Company has the following production and manufacturing cost data for October. Production: Beginning inventory 8,000 units that are 100% complete as to materials and 40% complete as to conversion costs; units started into production 27,000; ending inventory of 12,000 units that are 20% complete as to conversion costs. Manufacturing Costs: Beginning work in process inventory of $40,000, comprised of $30,000 of materials and $10,000 of conversion costs. Materials added during the month, $110,000; labor...
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...
Company La Estrella de Belén obtains the following information from its accounting records related to its...
Company La Estrella de Belén obtains the following information from its accounting records related to its product: Finished product Direct Labor $ 8.00 / unit Direct Materials $ 15.00 / unit Indirect Fixed Costs $ 6.00 / unit Indirect Variable Costs $ 8.00 / unit The company internally transfers this product to another of its divisions. It also sells this product to external customers for $ 35. What will be the transfer price if the company uses the variable cost...
Pitt Company has the following data for 20X4 concerning its manufacturing operations. PITT COMPANY DATA FOR...
Pitt Company has the following data for 20X4 concerning its manufacturing operations. PITT COMPANY DATA FOR 20X4 SALES AND MANUFACTURING OPERATIONS Selling price per unit $ 120 Variable manufacturing cost per unit 95 Variable operating cost per unit 15 Total fixed manufacturing costs 500,000 Total fixed operating costs 100,000 The company produced 100,000 units during the year and sold 90,000 of those units. REQUIRED: Answer the following questions related to the above data, showing appropriate calculations to support your answers....
The Painting Department of Y Manufacturing Company has the following production and manufacturing cost data for...
The Painting Department of Y Manufacturing Company has the following production and manufacturing cost data for October. Production: Beginning inventory 8,000 units that are 100% complete as to materials and 40% complete as to conversion costs; units started into production 27,000; ending inventory of 12,000 units that are 20% complete as to conversion costs. Manufacturing Costs: Beginning work in process inventory of $40,000, comprised of $30,000 of materials and $10,000 of conversion costs. Materials added during the month, $110,000; labor...
12. Ahmad Company has no beginning and ending inventories, and reports the following data about its...
12. Ahmad Company has no beginning and ending inventories, and reports the following data about its only product: Direct materials used $300,000 Direct labor $75,000 Fixed indirect manufacturing $250,000 Fixed selling and administrative $140,000 Variable indirect manufacturing $125,000 Variable selling and administrative $150,000 Selling price(per unit) $200 Units produced and sold 10,000 Ahmad Company uses the contribution approach to prepare the income statement. What is the contribution margin? A) $750,000 B) $1,000,000 C) $1,350,000    D) $1,625,000 16. Shoestring Company manufactures...
The Bright Lamp Company has budgeted its conversion cost for the small lamp production as $85,000...
The Bright Lamp Company has budgeted its conversion cost for the small lamp production as $85,000 for 1,300 production hours. Each unit produced by the cell requires 15 minutes of process time. During the month, 3,800 units are manufactured in the cell. The estimated material cost is $18 per unit. Provide the following journal entries. In your computations, round per unit cost to two decimal places and use rounded amount in subsequent calculations. If required, round your final answers to...