BUSINESS COLLEGE

Tri-bikes manufactures two different levels of bicycles: the Standard and the Extreme. The total overhead of $300,000 has traditionally been allocated by direct labor hours, with 150,000 hours for the Standard and 50,000 hours for the Extreme.After analyzing and assigning costs to two cost pools, it was determined that machine hours is estimated to have $200,000 of overhead, with 4,000 hours used on the Standard product and 1,000 hours used on the Extreme product.

It was also estimated that the setup cost pool would have $100,000 of overhead, with 1,000 hours for the Standard and 1,500 hours for the Extreme.

A. What is the overhead rate per product under Traditional costing?

What is the overhead rate under Absorption Costing for:

B. The machine pool overhead rate

C. The setup pool overhead rate

Answers

Answer 1

Answer:

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Estimated costs and direct labor hours:

The total overhead= $300,000

Standard= 150,000 hours

Extreme= 50,000 hours

1) Under traditional costing, overhead gets allocated using a single plantwide manufacturing overhead rate.

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 300,000/200,000= $1.5 per direct labor hour

Now, we can allocate overhead to each product:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Standard= 1.5*150,000= $225,000

Extreme= 1.5*50,000= $75,000

2) Machine:

Overhead= $200,000

Hours= 4,000 hours used on the Standard product and 1,000 hours used on the Extreme product.

Estimated manufacturing overhead rate= 200,000/5,000= $40 per hour

3)Set up:

Overhead= $100,000

Hours= 1,000 hours for the Standard and 1,500 hours for the Extreme.

Estimated manufacturing overhead rate= 100,000/2,500= $40

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Beamish Inc., which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 6,400 Variable costs per unit: Direct materials $ 60 Direct labor $ 54 Variable manufacturing overhead $ 4 Variable selling and administrative expense $ 17 Fixed costs: Fixed manufacturing overhead $ 236,800 Fixed selling and administrative expense $ 492,800 There were no beginning or ending inventories. The absorption costing unit product cost was:

Exercise 10-6 Direct Materials and Direct Labor Variances [LO10-1, LO10-2] Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 7.40 pounds $ 2.60 per pound $ 19.24 Direct labor 0.45 hours $ 8.00 per hour $ 3.60 During the most recent month, the following activity was recorded: 12,100.00 pounds of material were purchased at a cost of $2.50 per pound. All of the material purchased was used to produce 1,500 units of Zoom. 575 hours of direct labor time were recorded at a total labor cost of $5,750. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month.

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Direct material:

Standard= 7.40 pounds $ 2.60 per pound

Actual= 12,100 pounds of material were purchased for $2.50 per pound.

Direct labor:

Standard= 0.45 hours $ 8.00 per hour

Actual= 575 hours of direct labor time were recorded at a total labor cost of $5,750

Units produced= 1,500

To calculate the direct material price and quantity variance, we need to use the following formulas:

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (2.6 - 2.5)*12,100

Direct material price variance= $1,210 favorable

Direct material quantity variance= (standard quantity - actual quantity)*standard price

standard quantity= 1,500*7.4= 11,100

Direct material quantity variance= (11,100 - 12,100)*2.6

Direct material quantity variance= $2,600 unfavorable

To calculate the direct labor efficiency and rate variance, we need to use the following formulas:

Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate

Standard quantity= 1,500*0.45= 675

Direct labor time (efficiency) variance= (675 - 575)*8

Direct labor time (efficiency) variance= $800 favorable

Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity

Actual rate= 5,750/575= $10

Direct labor rate variance= (8 - 10)*575

Direct labor rate variance= $1,150 unfavorable

An agent informs owners in an area that a decline in property values over the past five years is due to an influx of minority families. He suggests that the trend will continue, and advises them to sell before it is too late. This agent is probably guilty of

Answers

Answer:

This agent is probably guilty of

Blockbusting

Explanation:

Blockbusting is an illegal act. It is a manipulative method used by real estate agents to get homeowners to sell or rent their property at a cheaper rate by lying to them that the socioeconomic demography of the neighborhood is changing, so they have to sell before it is too late. This can be seen in how the agent informs the owners that their property experienced a decline in the past 5 years because of the minorities who moved in. The Fair Housing Act of 1968 makes blockbusting illegal.

Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $244,200 and 9,200 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $245,000 and actual direct labor-hours were 6,100. The overhead for the year was: (Round your intermediate calculations to 2 decimal places.)

Answers

Answer:

The overhead for the year will be $245,000

Applied overheads in the year are $161,894 and Underapplied overheads are $83,106 total charged to cost of goods sold will be $245,000

Explanation:

Predetermined overhead rate = total estimated overhead / estimated direct labor-hours

Predetermined overhead rate = 244,200 / 9,200

Predetermined overhead rate = 26.54 per labor hour

Overhead for the year = Predetermined overhead rate X Actual Direct Labor hours

Overhead for the year = 26.54 x 6100

Overhead for the year = 161,894.00

Underapplied overheads = 245,000 - 161,894 = 83,106.00

Final answer:

The overhead for the year is $162,317.

Explanation:

To calculate the overhead for the year, we need to use the predetermined overhead rate based on direct labor-hours. The predetermined overhead rate is calculated by dividing the total estimated overhead by the estimated direct labor-hours. In this case, the predetermined overhead rate is $244,200 / 9,200 labor-hours, which is $26.57 per labor-hour.

To find the overhead for the year, we multiply the actual direct labor-hours by the predetermined overhead rate. In this case, the actual direct labor-hours are 6,100. So the overhead for the year is 6,100 labor-hours * $26.57 per labor-hour, which equals $162,317.

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4 "Youth culture" is a term that marketers use when they are trying to sell their product to which group?children between the ages of 1-5
children between the ages of 6-10
teenagers
college students

Answers

Children between the ages of 6-10. Hope it helps!

The Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31:Sales $ 1,350,000
Selling price per pair of skis $ 450
Variable selling expense per pair of skis $ 46
Variable administrative expense per pair of skis $ 19
Total fixed selling expense $ 140,000
Total fixed administrative expense $ 115,000
Beginning merchandise inventory $ 75,000
Ending merchandise inventory $ 120,000
Merchandise purchases $ 315,000
1. Prepare a traditional income statement for the quarter ended March 31.

2. Prepare a contribution format income statement for the quarter ended March 31.

3. What was the contribution margin per unit?

Answers

(1) The traditional format income statement for Alpine House, Inc for the quarter ended March 31 is shown below:ParticularsAmount ($)Sales1,350,000Less: Cost of Goods Sold:Beginning merchandise inventory 75,000 Add: Merchandise purchases 315,000 Goods available for sale390,000Less: Ending merchandise inventory 120,000 Cost of goods sold270,000Gross Profit1,080,000Less:

Operating Expenses:Variable selling expense46* units soldVariable administrative expense19* units soldTotal Variable Expenses65 Fixed Selling Expenses 140,000Fixed Administrative Expenses115,000Total Operating Expenses255,000Net Operating Income 825,000*Calculation of variable expenses:Variable selling expense per unit= $46Variable administrative expense per unit= $19Total variable expense per unit= $65($46 + $19)

(2) The contribution format income statement for the quarter ended March 31 is shown below:ParticularsAmount ($)Sales1,350,000Less: Variable Expenses:Variable selling expense (46*3,000 units)138,000Variable administrative expense (19*3,000 units)57,000

Total Variable Expenses195,000Contribution Margin1,155,000Less: Fixed Expenses: Fixed selling expenses140,000 Fixed administrative expenses115,000Total Fixed Expenses 255,000Net Operating Income900,000*Calculation of units sold: 3,000 units were sold (Sales/ Selling price per pair of skis = 1,350,000/450 = 3,000 units)

(3) The contribution margin per unit is $195. ($450 - $255) = $195.Contribution margin per unit is calculated as follows:Contribution margin per unit = Selling price per unit - Total variable expenses per unitSelling price per unit = $450Variable expenses per unit = $65 ($46 + $19)Contribution margin per unit = $450 - $65 = $385

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Name a product or a company that you are familiar with. Discuss how environmental forces (social, economic, technological, competitive, and regulatory) will impact that product/company over the next five years.

Answers

Answer:

The name of the product is Coke and this is a Pestel Analysis.

PESTEL is short for Political, Economic, Social, Technological, Environmental, and Legal. All representing factors that can and will impact the operations of any business.

Explanation:

Coca-Cola is a global company with is in the business of providing refreshments to its customers by the sale of Soda or soft drinks. Because of the nature of the product, the industry in which they play is heavily regulated and they must use the best technology in order to stay relevant, competitive, and dominant in the market.

Political factors

One of the regulators to whom Coca-cola must dance to its tune is the Food and Drugs Administration (FDA) a Federal Agency of the Department of Health and Human Services in the US. All Coca-cola product must meet their requirements as stipulated by law. If the laws enforced by FDA changes it could adversely affect the distribution, taxes, accounting, and all other operations of Coca-Cola.

Economical factors

Some economic factors that may affect a business like Coca-cola are:

Interest rates, exchange rates, recession, Inflation, Taxes, Demand / Supply.

One critical factor in this group which the company must be on the lookout for always is changes in taste and demand. Consumers are making a shift globally towards more healthy alternatives to soda. This is because, as the world becomes more sedentary due to shifts in global economic patterns as induced by the pandemic, risk factors relating to health care on the increase. Hence consumers want to ensure that they cut down on foods and beverages that increase their predisposition to conditions such as obesity, cancer, high blood pressure, etc.

To stay relevant and competitive, the company has to seek out healthy drinks that speak to all the various localities (which are over 200 countries).

Social factors

Examples of social factors that can affect a business are:

e-commerce adaptation, purchasing habits, ease of adoption of technology, changes in customer service expectation, the education level of consumers.

The purchasing habit for Coca-cola is changing in lots of countries. People are becoming more predisposed to buying products online. How will that affect the demand for the company's products? Will it increase as online food orders increase? can the company position itself to take advantage of the trend? If yes, then it is making taking advantage of its changing social environment.

Technological factors

Adoption of best-in-class machinery is one of the strategies that has enabled Coca-Cola to achieve higher quality and quantity of its products. Speed of delivery, processes that are optimized for the lowest costs and highest outputs are now being made possible with advances in technology. Coca-cola is taking advantage of technology especially in regions such as Europe.

Legal factors

Product liability, third-party liability, employer-employee (labor) relations, compliance, and regulatory factors are all within the scope of Coca-Cola's legal universe. Constantly managing this space of its operations will keep it from experiencing avoidable erosion of its bottom line and brand equity.

Environmental factors

Companies no longer compete on the basis of profitability alone. Global companies are the target of onslaughts from those who campaign against the degradation of the environment. One way they do so is to discourage the consumption of the goods of a company whose activities are harming the environment.

So companies all over the world are not competing based on the triple bottom line criteria: People, Planet, Profit.

This answers the questions whether

Coca-cola is in compliance with international best practices as far as labor law is concerned;
How does the company handle its effluents and wastes? is it just discharging them into the earth without treatment? or is it creatively converting them into economic products? how responsible is the company socially?
then of course there is the issue of keeping the books in the black

Cheers

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