What could management do to reduce the overhead

Assignment Help Accounting Basics
Reference no: EM13135122

The HITEC Company manufactures multimedia equipment designed to be sold to universities. The companys southeastern plant has undergone production changes that have resulted in decreased usage of direct labor and increased usage of automated processes. As a result, management no longer believes that its overhead allocation method is accurate and is considering changing from a traditional overhead allocation to an activity-based method. The controller has chosen the following activity centers and drivers costs for overhead: Purchase orders Setup Costs Testing costs Machine maintenance Cost Driver Number of orders Number of setups Number of tests Machine hours Overhead Cost Information $200,000 300,000 420,000 800,000 Driver Activity 25,000 15,000 16,000 50,000 Required A. Calculate the overhead rate each cost driver B. An order for 1,000 video projectors had the following requirement Number of purchase orders 3 Number of setups 5 Number of product tests 20 Machine hours 1,500 How much total overhead should be assigned to this order? C. What could management do to reduce the overhead costs assigned to these video projectors? What would be the impact on the net income of reducing overhead assigned to the video projectors?

Reference no: EM13135122

Questions Cloud

What does the current ratio measure : What is the current ratio? What does the current ratio measure? What are reasons for using the current ratio analysis?
Measurement of height of cylinder : The volume of a cylinder(think about the volume of a can)is given by v=pir^2h where r is the radius of the cylinder and h is the height of the cylinder.
Preparing the journal entries problem : Swanson Corporation issued $8 million of 20-year, 8 percent bonds on April 1, 2009, at 102. Interest is due on March 31 and September 30 of each year, and all of the bonds in the issue mature on March 31, 2029. Swanson's fiscal year ends on Decemb..
Determine the molecular formula of the compound : a sample of a binary compound of boron and chlorine weighing 2.842 g occupies .153 L. this sample is decomposed to give 0.664 g solid boron and enough gaseous chlorine to occupy .688 L at the same temperature and pressure. determine the molecular ..
What could management do to reduce the overhead : What could management do to reduce the overhead costs assigned to these video projectors? What would be the impact on the net income of reducing overhead assigned to the video projectors?
How much should holcomb recognize as loss on impairment : The machinery has a fair value of $210,000. How much should Holcomb recognize as loss on impairment.
What journal entry should siegle to record this exchange : The equipment had a recorded amount on Mayo's books of $21,000. What journal entry should Siegle make to record this exchange?
Calculate the amount of interest capitalized : On January 2, 2011, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2012. The company borrowed $1,500,000 at 8% on January 1 to help finance the construction.
Intangible assets under us gaap : What amount will be included in intangible assets on the company's December 31, 2008 financial statements prepared in accordance with IFRS? How much would be included in intangible assets under US GAAP?

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Required total production-cost of purchases

Compute the company's total required production in units of finished product for the entire three month period ending September 30. (Do not round intermediate calculations. Round your final answer to the nearest unit.)

  How would you paraphrase the definition of equilibrium price

How would you paraphrase the definition of equilibrium price?

  Cost of goods manufactured

Kushman Combines, Inc. has $20,000 of ending finished goods inventory as of December 31, 2010. If beginning finished goods inventory was $10,000 and cost of goods sold was $40,000, how much would Kushman report for cost of goods manufactured?

  Determine the cost ratio

Determine the cost ratio (retail method) for T games and comics store if the cost of goods available for sale is $36,000 and the retail value of goods available for sale is $90,000

  Profitability of an organization

Could we use managerial accounting "tools" to assess the profitability of an organization other than a manufacturing business, or are the topics we are learning only related to manufacturing?

  What are the advantages to normalization

What is data redundancy? We know that the normalization breaks up large tables into smaller more manageable tables.

  Compute the target selling price

Talia Corp. produces digital cameras. For each camera produced, direct materials are $24, direct labor is $16, variable manufacturing overhead is $12, fixed manufacturing overhead is $28, variable selling and administrative expenses are $10, and f..

  Influences on materiality judgement

Which of the following would an auditor most likely use in determining the auditor's preliminary judgment about materiality?

  Calculate the dollar amount of each type of service

Rapid Auto has over 200 auto-maintenance service outlets nationwide. It provides primarily two lines of service: oil changes and brake repair.

  What is marys basis in the real property

Mary received a liquidating distribution from ABC Corporation as part of the complete liquidation of ABC Corporation. Mary's basis for her ABC Corporation stock was $10,000.

  Performing accounting and review services

Jones, CPA, entered into a signed contract with Foster Corp. to perform accounting and review services. If Jones repudiates the contract prior to the date performance is due to begin, which of the following is false?

  Fraudulent activity in business

What type of fraudulent activity could this have been and what type of testing could have been included in the audit to discover it? What can auditors do to verify inventory levels and that no fraudulent activity is occurring between annual inven..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd