[jaboskey]

Managerial Accounting

Plantwide vs departmental overhead rates) Ida Copelovici Manufacturing department is staffed by only one person. Judy schwalm who runs 15 machines. The assembly department is highly labour-intensive ,with 20 direct labourers and three machines. All products manufactured by copelovici pass through both department. Product KL85 uses the follow quantities of machine time and direct labour hours.

Cutting assembly
Machine hours 9.0 0.12
Direct labour hours 0.03 3.00

Copelovici manufacturing Ltd. Has estimated the following total manufacturing overhead cost and activity levels for each department for 2008
Cutting Assembly
Planned machine hours $72,000 $14,280
Planned direct labour hrs $5,200 $40,000
Planned manufactur overhead $862,200 $432,000
QUESTION BELLOW:
Required:

a) Copelovici Manufacturing Ltd's Accountant , jules kronsi uses a plantwide rate based on machine hours for manufacturing overhead application. What rate will be used for fiscal 2008?

b) how much manufacturing overhead is assigned to each unit of product KL85 under the method currently in use?

c) the company's auditors inform management that the method being used to apply manufacturing overhead is inappropriate. They indicated that the machine hours should be used as an application based in cutting and direct labour hours should be use in assembly. Using these bases, determine the departmental rate for fiscal 2008

d)using the information from part(C), how much manufacturing overhead would be assigned to each unit of product KL85 if department rate were used?

[Just Looking]

Please read this announcement first.

Announcement:

We can help you work through it but you have to show your work first and we'll let you know if it's right and help explain where it isn't. Do it in steps if you wish, starting with your answer to question a. We will also answer specific questions. We won't do the assignment, though. Thanks.

a) Just to get you started: Overhead rate is the estimated overhead costs divided by the estimated activity base

[makenna2]

a, 862200 + 432000 = 1264600
1264600 divided by (72000 + 14280) = 14.65
14.65 rate