adium Inc. produces a variety of household cleaning products. Palladium’s controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per Direct Labor Hour Maintenance $ 86,000 $0.20 Power 0.45 Indirect labor 140,000 2.10 Rent 35,000 Next year, Palladium expects production to require 90,000 direct labor hours. Required: Question Content Area
adium Inc. produces a variety of household cleaning products. Palladium’s controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per Direct Labor Hour Maintenance $ 86,000 $0.20 Power 0.45 Indirect labor 140,000 2.10 Rent 35,000 Next year, Palladium expects production to require 90,000 direct labor hours. Required: Question Content Area
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 64E: Use the following information for Exercises 9-63 and 9-64: Palladium Inc. produces a variety of...
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Palladium Inc. produces a variety of household cleaning products. Palladium’s controller has developed
Overhead Item | Total Fixed Cost | Variable Rate per Direct Labor Hour |
Maintenance | $ 86,000 | $0.20 |
Power | 0.45 | |
Indirect labor | 140,000 | 2.10 |
Rent | 35,000 |
Next year, Palladium expects production to require 90,000 direct labor hours.
Required:Question Content Area
1. Prepare an overhead budget for the expected level of direct labor hours for the coming year.
Variable costs: | Rate per Hour | Activity Level 90,000 Hours |
blank |
Maintenance | $fill in the blank ddf6cc027003019_1 | $fill in the blank ddf6cc027003019_2 | blank |
Power | fill in the blank ddf6cc027003019_3 | fill in the blank ddf6cc027003019_4 | blank |
Indirect labor | fill in the blank ddf6cc027003019_5 | fill in the blank ddf6cc027003019_6 | blank |
Total variable cost | blank | $fill in the blank ddf6cc027003019_7 | blank |
blank | blank | blank | blank |
Fixed costs: | blank | blank | blank |
Maintenance | blank | $fill in the blank ddf6cc027003019_8 | blank |
Indirect labor | blank | fill in the blank ddf6cc027003019_9 | blank |
Rent | blank | fill in the blank ddf6cc027003019_10 | blank |
Total fixed costs | blank | $fill in the blank ddf6cc027003019_11 | blank |
Total overhead costs | blank | $fill in the blank ddf6cc027003019_12 | blank |
Question Content Area
2. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected.
Activity Level | |||
Rate per Hour | fill in the blank e2f8e9066fc5079_1 Hours |
fill in the blank e2f8e9066fc5079_2 Hours |
|
Variable costs: | |||
Maintenance | $fill in the blank e2f8e9066fc5079_3 | $ fill in the blank e2f8e9066fc5079_4 | $ fill in the blank e2f8e9066fc5079_5 |
Power | fill in the blank e2f8e9066fc5079_6 | fill in the blank e2f8e9066fc5079_7 | fill in the blank e2f8e9066fc5079_8 |
Indirect labor | fill in the blank e2f8e9066fc5079_9 | fill in the blank e2f8e9066fc5079_10 | fill in the blank e2f8e9066fc5079_11 |
Total variable costs | $fill in the blank e2f8e9066fc5079_12 | $fill in the blank e2f8e9066fc5079_13 | |
Fixed costs: | |||
Maintenance | $ fill in the blank e2f8e9066fc5079_14 | $ fill in the blank e2f8e9066fc5079_15 | |
Indirect labor | fill in the blank e2f8e9066fc5079_16 | fill in the blank e2f8e9066fc5079_17 | |
Rent | fill in the blank e2f8e9066fc5079_18 | fill in the blank e2f8e9066fc5079_19 | |
Total fixed costs | $fill in the blank e2f8e9066fc5079_20 | $fill in the blank e2f8e9066fc5079_21 | |
Total overhead costs | $fill in the blank e2f8e9066fc5079_22 | $fill in the blank e2f8e9066fc5079_23 |
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