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Jocey Manufacturing Company uses two departments to make its products. Department I is a cutting department that is machine intensive and uses very few employees. Machines cut and form parts and then place the finished parts on a conveyor belt that carries them to Department II, where they are assembled into finished goods. The assembly department is labor intensive and requires many workers to assemble parts into finished goods. The company’s manufacturing facility incurs two significant overhead costs: employee fringe benefits and utility costs. The annual costs of fringe benefits are $264,000 and utility costs are $192,000. The typical consumption patterns for the two departments are as follows. Department I Department II Total Machine hours used 15,700 4,300 20,000 Direct labor hours used 5,300 10,700 16,000 The supervisor of each department receives a bonus based on how well the department controls costs. The company’s current policy requires using a single allocation base (machine hours or labor hours) to allocate the total overhead cost of $456,000. Required: a. Assume that you are the supervisor of Department I. Choose the allocation base that would minimize your department’s share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected. (Do not round intermediate calculations.) b. Assume that you are the supervisor of Department II. Choose the allocation base that would minimize your department’s share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected. (Do not round intermediate calculations.) c. Assume that you are the plant manager and have the authority to change the company’s overhead allocation policy. Formulate an overhead allocation policy that would be fair to the supervisors of both Department I and Department II. Compute the overhead allocations for each department using your policy. (Do not round intermediate calculations.)
Assume your company is invplved in a major lawsuitand the probable damages are estimated to be 2,000,000. Describe the effects of the damage estimates would have on the financial statements of the corporation and a partnership. How do disclosure requ..
A company acquires a bulldozer for $500,000. The useful life of the bulldozer is 10 years. The treads with a value of $50,000 will need to be replaced every five years. The blade has a value of $20,000 and needs to be replaced every two years. At the..
Calculate the number of canoes that Paddle Away must sell at $710 each to generate $116,000 profit - calculate its new break-even point in units and in sales dollars.
Locksafe Company manufactures burglar-resistant commercial door locks. Recently, the company began selling locks on the Web. Based on this information prepare a sales budget by quarter for the next year.
CVP analysis giving decision if the price is reduced and Heister's president, J. R. D'Angelo, expects an annual profit of $100,000. How many rings must be sold to attain this profit
State the effect of accelerated depreciation relative to straight-line depreciation on Depreciation expense in the first year and The asset's net book value after two years.
A corporation produces output with a market price of $200 per unit. The marginal product of capital is 1/(2K), where K is units of capital, with each unit assumed to cost $1. what is the effective corporate tax rate? what is the optimal level of capi..
At the bottom of one of the income statements you prepare, explain which statement you feel is the most informative for a company? Explain your reasoning. Explain any formulas used.
Please explain a feature or requirement in internal audit or governmental audit reports. Identify audit work considered to be audit sampling and distinguish it from work not considered to be audit sampling.
Evaluate Andreas basis in the partnership interest at the starting of the year
Dividends ( qualified) on Big Bank stock $900, Dividends (qualified) on Big Gas Company Stock $490, Dividends ( nonqualified) from Mango Mutual Fund $145, interest on Washington State Municipal Bonds $700, Interest on Big Electric Company Bonds $675...
What would be effect on the company's overall net operating income of dropping product S85U? Should the product be dropped?
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