Question :
96. The total factory overhead for Big Light Company budgeted for : 1251757
96. The total factory overhead for Big Light Company is budgeted for the year at $380,000. Big Light manufactures two different products – night lights and desk lamps. Night lights is budgeted for 30,000 units. Each night light requires 1/2 hour of direct labor. Desk lamps is budgeted for 40,000 units. Each desk lamp requires 2 hours of direct labor. Determine (a) the total number of budgeted direct labor hours for year, (b) the single plantwide factory overhead rate using direct labor hours as the allocation base, and (c) the factory overhead allocated per unit for each product using the single plantwide factory overhead rate calculated in (b).
97. The Sawtooth Leather Company manufactures leather handbags and moccasins. For simplicity reasons, they have decided to use the single plantwide factory overhead rate method to allocate factory overhead. Calculate the amount of factory overhead to be allocated to each unit using direct labor hours. Handbags = 60,000 units, 2 hours of direct labor Moccasins= 40,000 units, 3 hours of direct labor Total Budgeted factory overhead cost = $360,000
98. Explain why it is imperative that proper factory overhead be allocated in factories that produce multiple products.
99. The Camper’s Edge Factory produces two products – canopies and tents. It has two separate departments – cutting and sewing. The budget is $350,000 for the cutting department and $400,000 for the sewing department. Each canopy requires 2 hours of cutting and 1 hour of sewing. Each tent requires 1 hour of cutting and 6 hours of sewing. The budget estimates that 20,000 canopies and 10,000 tents will be manufactured during the year. Determine (a) the total number of budgeted direct labor hours for the year in each department, (b) the departmental factory overhead rates for both departments and (c) the factory overhead allocated per unit each product using the department factory overhead allocation rates using direct labor hours as the base.
100. The Valhalla Company manufactures small lamps and desk lamps. The following shows the activities per product:
Setups Inspections Assembly (DLH)
Small Lamps – 8,000 units10,00032,0008,000
Desk Lamps – 16,000 units30,00014,00046,000
Using the following information prepared by the Valhalla Company, determine (a) the activity rates for each activity and (b) the activity based factory overhead per unit for each product.
Activity Pool Activity Base Budgeted Amount
Setups40,000$160,000
Inspections46,000$230,000
Assembly (DLH)54,000$324,000
101. Tibet Company sells glasses, fine china, and everyday dinnerware. They use activity-based costing to determine the cost of the shipping and handling activity. The shipping and handling activity has an activity rate of $7 per pound. A box of glasses weighs 2 lbs, the box of china weighs 4 lbs, and a box of everyday dinnerware weighs 6 lbs. (a) Determine the shipping and handling activity for each product and (b) determine the total shipping and receiving costs for the china if 3,500 boxes are shipped.
102. The Beauty Beyond Words Salon uses an activity-based costing system in its beauty salon to determine the cost of services. The salon has determined the costs of services by activity as follows:
ActivityActivity Rate
Hair Washing$2.50
Conditioning$3.00
Chemical Treatment$25.00
Styling$10.00
Hair WashingConditioningChemical TreatmentStyling
Hair Cut1100
Complete Style1101
Perms2311
Hi-Lights3421
Calculate the cost of services for a Hi-light.
103. Bugaboo Co. manufactures three types of cookies: Fluffs, Crinkles, and Snaps. The production process is relatively simple, and factory overhead costs are allocated to products using a single plantwide factory rate based on direct labor hours. Information for the month of May, Bugaboo’s first month of operations, follows:
BudgetedUnit Volume Direct LaborHours per unit
Fluffs80,000 boxes0.10
Crinkles60,000 boxes0.20
Snaps20,000 boxes0.50
Bugaboo has budgeted direct labor costs for May at $8.50 per hour. Budgeted direct materials costs for May are: Fluffs, $0.75/unit; Crinkles $0.40/unit; and Snaps $0.30/unit.Bugaboo’s budgeted overhead costs for May are:
Indirect labor$280,000
Utilities65,000
Supplies45,000
Depreciation30,000
Total$420,000
Assume that Bugaboo sells all the boxes it produces in May.
(a)Compute Bugaboo’s plantwide factory overhead rate for May.
(b)Compute May’s product cost for each type of cookie.
(c)Does Bugaboo’s use of a plantwide factory overhead rate in any way distort May’s product costs?
104. Kettle Factory produces two similar products – gloves and mittens. The total plant budget is $900,000 with 600,000 estimated direct labor hours. It is further estimated that glove production will require 375,000 direct labor hours and mitten production will require 225,000 direct labor hours.
a)Determine the single plant factory overhead rate based on direct labor hours.
(b)How much is the factory overhead cost per pair of gloves if each pair requires 2 hours to produce?
(c)How much is the factory overhead cost per pair of mittens if each pair takes 1.5 hours to produce?
(d)How much total factory overhead will be allocated to gloves production if 187,500 pairs are budgeted and 190,000 pairs are actually produced during the period?
(e)How much total factory overhead will be allocated to mittens production if 150,000 pairs are budgeted and 140,000 pairs are actually produced during the period?
