What is the average direct labor cost rate

Assignment Help Financial Management
Reference no: EM13471

Question 1:

Assume a manufacturer incurs 2,000,000 hours of direct productive labor in a year at a total direct labor cost of $50,000,000. The total manufacturing indirect expense for the same period is $67,500,000.

1. What is the average direct labor cost rate?

2. If the overhead were distributed on the basis of direct labor hours, what would the rate be per hour.

3. if the overhead were distributed on the basis of direct labor dollars, what would the percentage rate be. Using the same factors above, assume that we have two projects each requiring 100,000 direct labor hours.

Project A, because of work requirements and personnel assigned, direct labor costs of $2,040,000 or $20.40 per hour, were experienced. Project B, requires a direct labor cost of $2,800,000, or $28.00 per hour.

Question 2:

Calculate the amount of overhead that would be allocated to the two projects on a labor hour and labor dollar basis for Project A &B 2) A cost estimate for a contract, included 3,000 hours of direct labor, the company uses a plant-wide overhead rate. Assume that the projected overhead cost for the coming period are $3,800,000 and projected direct labor amounts to 215,000 hours.

1. What is the overhead rate

2. using the above rate what is the dollar amount of the overhead applicable to the contract Upon review of the company's operations you find that it has two department, assembly and machine shop.

The overhead accounts are Assembly Department- projected overhead costs $1,800,000 and projected direct labor hours is 165,000 Machine Department - projected overhead costs $2,000,000 and projected direct labor hours is 50,000

1. Calculate a department overhead rate per labor hour for Assembly and Machine Departments.

2. if a department rate were used, what amount of overhead would be allocated to the proposed contract? What is the plant wide rate?

3.What rate should the buyer use- plant-wide rate or department rate?

Question 3:

Kmart forecasts it overhead rat for 20xx at $30.00 per hour. this is based on the assumption that the a fixed portion of indirect manufacturing cost would amount to $12,000,000 and that the variable indirect manufacturing expenses would amount to 6000,000 hours. Consider the effect of the following assumptions.

1. At the end of 20xx actual company experience shows indirect manufacturing cost of $15,000,000 and actual direct labor hours of 600,000 Was the overhead under absorbed or over absorbed? Did it benefit the company or its customer and by how much$____

2. At the end of 20xx actual overhead cost amounted to $21,500,000 and the company expended 400,000 direct labor hours. Was the overhead under absorbed or over absorbed? Did it benefit the company or its customer and by how much$____

3. At the end of 20xx actual overhead cost amounted to $17,000,000 and the company expended 450,000 direct labor hours Was the overhead underabsorded or over absorbed? Did it benefit the company or its customer and by how much$____

Reference no: EM13471

Questions Cloud

Marketing research project : Project that required to plan and strategize effectively. If you use your time efficiently. You are to create a report that analyzes marketing research conducted by you for any company.
Shadow effect while rolling a sphere : Shadow effect while rolling a sphere as well as the options of shading and lighting.
Describe venture debt capital and venture equity capital : Describe venture debt capital and venture equity capital.
Iimplement a client-server of the game : Iimplement a client-server version of the rock-paper-scissors-lizard-Spock game.
What is the average direct labor cost rate : What is the average direct labor cost rate and What is the overhead rate.
Find the natural domain : Find the natural domain of the given functions.
Advanced design methodologies : 8 x product engineering and design review (week 2 – 12), ~3 pages per item which must contain a brief description of the product then delve into concepts such as materials selection, manufacturing methods, life cycle analysis, recyclability and overa..
Business strategy and strategic human resource management : This project report describes the co-ordination and alignment of business strategy with strategic human resource management.
Design style elements in asp : Add drop down lists for modifying the different style elements for the label element that displays the time

Reviews

Write a Review

 

Financial Management Questions & Answers

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Determine the constant growth rate in dividends

Arbitrage Financial is offering two possible investments with the same level of risk.

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Compute the cost of equity financing

This assignment shows how to Compute the cost of equity financing and aslo Compute the Weighted Average Cost of Capital.

  Runge-kutta method

Use Runge-Kutta method to answer the solution.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Financial assessment of mk robe-stones limited business plan

Financial Assessment of MK Robe-Stones Limited Business Plan.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

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