HomeworkLib
Question

Manufacturer estimates that it will incur variable indirect costs for the month of October of $70,000...

Manufacturer estimates that it will incur variable indirect costs for the month of October of $70,000 and $30,000 of fixed costs. The company uses direct labor hours to calculate the predetermined overhead rate and predicted that 3,000 direct labor hours would be used in October. Actual direct labor hours amounted to 3,200.

1) What is the allocation rate per direct labor hour for October?

2) What is the total cost allocation for October?

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

1) Allocation rate per labour hour = Total overhead (i.e, indirect costs) /estimated Direct labour hours

= 70000 / 3000

= 23.33 per hour

2) Allocated cost for october = Actual labour hours x Allocation rate

= 3200 x 23.33

= ₹74656

Here, fixed cost are of no use as it is not an indirect cost.

0 0
Add a comment
Know the answer?
Add Answer to:
Manufacturer estimates that it will incur variable indirect costs for the month of October of $70,000...
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. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • K Company estimates that overhead costs for the next year will be $3,500,000 for indirect labor...

    K Company estimates that overhead costs for the next year will be $3,500,000 for indirect labor and $940,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 100,000 direct labor hours are planned for this next year, what is the company's plantwide overhead rate? Multiple Choice $0.02 per direct labor hour. $44.40 per direct labor hour. $35.00 per direct labor hour. $9.40 per direct labor hour. $0.11 per direct labor hour.

  • K Company estimates that overhead costs for the next year will be $3,700,000 for indirect labor...

    K Company estimates that overhead costs for the next year will be $3,700,000 for indirect labor and $890,000 for factory utilities. The company uses direct labor hours as its overhead allocation base If 125,000 direct labor hours are planned for this next year, what is the company's plantwide overhead rate? K Company estimates that overhead costs for the next year will be $2,948,000 for indirect labor and $880,000 for factory utilities. The company uses direct labor hours as its overhead...

  • 53-6 (SIMllar tO) Question Help Falmouth Pools manufactures swimming pool equipment. Falmouth estimates total manufacturing overhead...

    53-6 (SIMllar tO) Question Help Falmouth Pools manufactures swimming pool equipment. Falmouth estimates total manufacturing overhead costs next year to be S1,200,000. Falmouth also estimates it will use 18,750 direct labor hours and incur $1,000,000 of direct labor cost next year. In addition, the machines are expected to be un for 15,000 hours. Compute the predetermined manufacturing overhead rate for next year under the following independent situations: . Assume that the company uses direct labor hours as its manufacturing overhead...

  • The Meredith Company reported the following information: Indirect Costs Direct Professional Variable Fixed Total |...

    The Meredith Company reported the following information: Indirect Costs Direct Professional Variable Fixed Total | Labor-Hours (1) (2) (3) 50,000 $70,000 $120,000 3,400 Variable Indirect Cost Rate per Direct Professional Labor-Hour (5) S14.70 Fixed Indirect Cost Rate per Direct Professional Labor-Hour (6) $20.58 Total Allocation Rate per Direct Professional Labor-Hour High- output month Low- output month 10,000 70,000 $80,000 900 S11.11 $77.77 Required: Compute the Total Allocation Rate per Direct Professional Labor-Hour. $352.90; 888.88 $35,299.90; $88,888.88 $3,529.90; $8,888.88 $35.29; $88.88...

  • Rasmussen Corporation expects to incur indirect overhead costs of $80,000 per month and direct manufacturing costs...

    Rasmussen Corporation expects to incur indirect overhead costs of $80,000 per month and direct manufacturing costs of $12 per unit. The expected production activity for the first four months of the year are as follows. Estimated production in units January February March 6,000 7,000 3,000 April 4,000 Required a. Calculate a predetermined overhead rate based on the number of units of product expected to be made during the first four months of the year. b. Allocate overhead costs to each...

  • emaining Times thout 2.857 points Question Completion Status QUESTIONS Durin October Hybrid Corporation incurred $70,000 of...

    emaining Times thout 2.857 points Question Completion Status QUESTIONS Durin October Hybrid Corporation incurred $70,000 of direct labor costs and $2.000 of indirect labor costs. The journal entry to record the accus of these wages would include a credit to Work in Process of $70.000 credit to Work in Process of 5 73.000 debit to Work in Process of $73,000 debit to Work in Process of $70,000 2.857 points QUESTION 9 Reynolds Corporation bases its predetermined overhead rate on the...

  • West Company estimates that overhead costs for the next year will be $5,240,000 for indirect labor...

    West Company estimates that overhead costs for the next year will be $5,240,000 for indirect labor and $550,000 for factory utilities. The company uses machine hours as its overhead allocation base. If 150,000 machine hours are planned for this next year, what is the company's plantwide overhead rate? $.0259 per machine hour. $34.93 per machine hour. $38.60 per machine hour. $3.67 per machine hour.

  • Treasurers, Inc., a manufacturer of gift articles, uses a single plantwide rate to allocate indirect costs...

    Treasurers, Inc., a manufacturer of gift articles, uses a single plantwide rate to allocate indirect costs with machine hours as the allocation base. Estimated overhead costs for the year are $6,000,000. Estimated machine hours are 27,000. During the year, the actual machine hours used were 34,000. Calculate the predetermined overhead allocation rate. (Round your answer to the nearest dollar.) O A. $118 OB. $67 O C. $222 OD. $176

  • (b) Prepare a flexible budget report for October. (List variable costs before fixed costs.) BUMBLEBEE COMPANY...

    (b) Prepare a flexible budget report for October. (List variable costs before fixed costs.) BUMBLEBEE COMPANY Packaging Department Manufacturing Overhead Flexible Budget Report For the Month Ended October 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Costs Bumblebee Company estimates that 387,400 direct labor hours will be worked during the coming year, 2020, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year. Fixed Overhead Costs Variable Overhead...

  • K Company estimates that overhead costs for the next year will be $2,988,000 for indirect labor...

    K Company estimates that overhead costs for the next year will be $2,988,000 for indirect labor and $830,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 83,000 direct labor hours are planned for this next year, how much overhead would be assigned to a product requiring 4 direct labor hours?

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT