Week 4 P4-4 P4-5 P4-10
P4-4
Listed below are the budgeted factory overhead costs for 2011 for Muncie
Manufacturing, Inc.., at the projected level of 2,000 units:
EXPENSES:
indirect
materials...............................................$ 10,000
Indirect
labor...................................................... 20,000
Power................................................................
15,000
Straight-line
depreciation..................................... 30,000
Factory
property Tax........................................... 28,000
Factory
Insurance............................................... 12,000
Total....................................................................$115,000
Required:
Prepare
flexible budgets for factory overhead at the 1,000, 2,000, and 4,000 unit
levels. (Hint: You must first decide which of the listed costs should be
considered variable and which should be fixed.)
P4-5 Cake Products Inc, is divided
into five departments, mixing, blending, finishing, factory office and building
maintenance. The first three departments are engaged in production work.
Factory Office and Building Maintenance are service departments. During the
month of June, the following factory overhead was incurred for the various
departments:
Blending
$18,000
building maintenance $6,400
finishing
$25,000
Building
maintenance - on the basis of floor space occupied by the other departments as
follows: mixing 10,000 sqft, blending $4,500 sqft, finishing 10,500 sqft and
factory office 7,000 sq ft.
Factory
office - on the basis of number of employees as follows : mixing 30, blending
20 and finishing 50
Prepare
schedules showing the distribution of the service departments expenses for the
following:
1.
The direct distribution
method
2.
The sequential distribution method in the order of number of other departments
served.
P4-10 Con-Aggie Manufacturing Company
is studying the results of applying factory overhead to production. The
following data have been used: estimated factory overhead: $60,000; estimated
materials costs, $50,000; estimated direct labor costs $60,000; estimated
direct labor hours 10,000; estimated machine hours 20,000; work in process at
the beginning of the month, none.
Job
|
Materials Cost
|
Direct Labor Costs
|
Direct Labor Hours
|
Machine Hours
|
Date Jobs Completed
|
101
|
5,000
|
6,000
|
1000
|
3,000
|
10-Nov
|
102
|
7,000
|
12,000
|
2,000
|
3,200
|
14-Nov
|
103
|
8,000
|
13,500
|
2,500
|
4,000
|
20-Nov
|
104
|
9,000
|
15,600
|
2,600
|
3,400
|
In process
|
105
|
10,000
|
29,000
|
4,500
|
6,500
|
26-Nov
|
106
|
11,000
|
2,400
|
400
|
1,500
|
In process
|
Total
|
50,000
|
78,500
|
13,000
|
21,600
|
1.
Compute the predetermined rate, based on the following:
a.
direct labor cost, b. direct labor hours, c. machine hours.
2.
Using each of the methods, compute the estimated total cost of each job at the
end of the month.
3.
Determine the under- or over applied factory overhead, in total, at the end
ofthe month under each of the methods.4. Which method would you recommend, and why?
Problem
4-10
|
1.
|
Predetermined
rates:
|
|
|
|
||
|
a.
|
Direct
labor cost rate
|
|
Estimated
overhead
|
|
Estimated
labor cost
|
|
|
100%
|
=
|
60,000
|
÷
|
60,000
|
|
|
|
|
|
|
|
|
|
|
