Evaluate the overhead allocation rate, Cost Accounting

Assignment Help:

Vintage Auto Company manufactures parts to order for antique cars. Vintage Auto makes everything from fenders to engine blocks. Each customer order is treated as a job. Vintage Auto currently has two jobs, No. 9823 and No. 9824 that are complete, although overhead has not yet been applied. The company wants to know what each job's cost would be under alternative overhead allocation rates based on: (1) direct labor cost, (2) direct labor hours, and (3) machine hours. Estimates for this year are as follows:
Direct labor cost $300,000
Direct labor hours 25,000
Machine hours 8,000
Overhead costs $200,000
Depreciation on machinery accounts for 75 percent of the overhead costs. The job-cost sheets show:


Job 9823 Job 9824
Direct material $ 1000 $2000
Direct labor cost $1,400 $1,400
Direct labor hours 150 130
Machine hours 130 270

Required

a. Determine the overhead allocation rate under the three suggested allocation bases. Round to the two decimal places.
b. Calculate the cost of Job 9823 and Job 9824 using each of the three bases. Round to two decimal places.
c. Discuss which allocation base appears preferable.


Related Discussions:- Evaluate the overhead allocation rate

#title.journal., conard transfered 10000 from her account to the business

conard transfered 10000 from her account to the business

Activity Based Costing, How do I figure the estimated activity and estimate...

How do I figure the estimated activity and estimated allocation base?

Prepare the entry to assign factory labor to production, The gross earnings...

The gross earnings of the factory workers for Vargas Company during the month of January are $66,000. The employer's payroll taxes for the factory payroll are 8,000. The fringe ben

What would be the impact on net income, Brandywine Homecare, a not-for-prof...

Brandywine Homecare, a not-for-profit business, had revenues of $12 million in 2011. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $

Determine taxable profit, While on a business trip to Texas, David attended...

While on a business trip to Texas, David attended a mortgage foreclosure auction. At the auction (held on February 4, 1999), he acquired an abandoned sugarcane farm near Pearland.

Monetary performance and the financial position, The question required cons...

The question required consideration of both the monetary performance and the financial position, from the perception of a potential lender. As with previous questions, candidates w

Cvp and computer applications, CVP and Computer Applications The broad...

CVP and Computer Applications The broad availability of personal computers encourages more managers to apply cost volume profit analysis. Computers can quickly create the comp

Materials transaction, Materials Transaction i. Purchase of Materials ...

Materials Transaction i. Purchase of Materials on Credit ii. Return of Materials to Suppliers iii. Purchase of Materials in Cash. The above transactions affect both t

Find the breakeven discount rate, The government of a small South Pacific i...

The government of a small South Pacific island is considering whether to allow development of a small but valuable deposit of phosphate rock. Not having the resources to develop an

Computing information, This coursework is intended to help you develop your...

This coursework is intended to help you develop your understanding of shell scripting in both a Windows and Unix environment. You should undertake this coursework in groups cons

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