Determine the estimated direct labor, Accounting Basics

Assignment Help:

1. Shaving 5% of the estimated direct labor hours in the predetermined overhead rate will result a high overhead rate, which would likely result a high credit balance of overapplied overhead for the year. When managers increased the amount of direct labor hours, there is a likely related increase of factory supervisors, the factory space to be maintained, and factory supplied and utilities consumed which results to more actual cost. Thus there is a high degree of correlation between the quantity of direct labor used and the amount of manufacture overhead used. However, with the technology of machines which leads to machine hours, direct labor being reduced and manufacturing overhead increasing, the correlation between direct labor and manufacturing overhead began to wane. Therefore we see a cumulative effect of overapplying overhead all recognized in December when Manufacture Overhead is closed out of the cost of good sold. If we constantly close the balance every month or every quarter, overtime the balance would get smaller and smaller over the course of the year.

2. The question if Cristin Madsen should go along with the general manager's request really depends who she is working for. She may work for the general manager of the division or the corporate controller who may not necessarily know the outcome of shaving 5% of the estimated direct labor. It also seems out of the ordinary to Cristin of eliminating a "Christmas bonus" be such a bad idea. However, it's not for Cristin to decide.


Related Discussions:- Determine the estimated direct labor

What is payroll record keeping, What is Payroll record keeping Employe...

What is Payroll record keeping Employer should maintain payroll records which will supply the name, social security number, address, gross earnings for every payroll, period o

Show the company''s balance sheet, Q. Show the company's Balance sheet? ...

Q. Show the company's Balance sheet? Balance sheet the balance sheet Exhibit contains the liabilities, assets and stockholders' equity items taken from the work sheet. Note tha

Branches of accounting, introduction,features,objectives,types of branches,...

introduction,features,objectives,types of branches,difference between branches and departments

Accounting concepts and standards, Any activity which you perform is assist...

Any activity which you perform is assist if you comprise a set of rules to guide your efforts. Moreover, you determine that these rules are of more value to you if they are standar

Worthington company issued 1, Worthington Company issued 1,000,000 face val...

Worthington Company issued 1,000,000 face value, 10% bonds on July 1 2012, when the market rate of interest was 12%. Interest payments are due every July 1 and January 1. Worthin

Illustrate exchange-price concept, Q. Illustrate Exchange-price concept? ...

Q. Illustrate Exchange-price concept? Exchange-price (or cost) concept (principle). The majority of the amounts in an accounting system are the objective money prices determine

Advance accounting, hi my name is harpreet kaur. I need help for my assignm...

hi my name is harpreet kaur. I need help for my assignment, how can I contact you? and how much time take to make one assignment?

In accounting, 1. what is accounting ? 2. what should we/i do to know accou...

1. what is accounting ? 2. what should we/i do to know accounting 3. what are the basics of accounting? 4 is accounting is hard ?

Dividing partnership income, Dividing Partnership Income Desmond Drury ...

Dividing Partnership Income Desmond Drury and Ty Wilkins have decided to form a partnership. They have agreed that Drury is to invest $44,700 and that Wilkins is to invest $1

Write Your Message!

Captcha
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