Petrie Financial Services provides finance and accounting consulting services to clients. Petrie incurred 110 hours of labor for Layline Corp. at a cost of $85 per hour, and billed Layline $165 per hour. Overhead is applied at 58% of professional labor cost. How much is the cost of the Layline client using traditional costing? O $23,573 O $14,773 O $9,350

Petrie Financial Services provides finance and accounting consulting services to clients. Petrie incurred 110 hours of labor for Layline Corp. at a cost of $85 per hour, and billed Layline $165 per hour. Overhead is applied at 58% of professional labor cost. How much is the cost of the Layline client using traditional costing? O $23,573 O $14,773 O $9,350

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Description: Petrie Financial Services provides finance and accounting consulting services to clients. Petrie incurred 110 hours of labor forLayline Corp. at a cost of $85 per hour, and billed Layline $165 per hour. Overhead is applied at 58% of professional lab

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1EA: Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor...

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Similar questions

Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?
A company calculated the predetermined overhead based on an estimated overhead of $70.000, and the activity for the cost driver was estimated as 2,500 hours. If product A utilized 1,350 hours and product 8 utilized 1,100 hours, what was the total amount of overhead assigned to the products? A. $35000 B. $30.800 C. $37,800 D. $68,600
SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following: The accountant computed the inventory cost of this order to be 4.30 per unit. The annual budgeted overhead in dollars was: a. 577,500. b. 600,000. c. 645,000. d. 660,000.
The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
A company has an overhead application rate of 120% of direct labor costs. How much overhead would be allocated to a job if it required total labor costing $30,000? O $6.000 O $25.000 O $36,000 O $187.500 O $360.000 Question 10 O.K. Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. O.K. expects to incur $1,100,000 of overhead during the next period and expects to use 50,000 labor hours at a cost of $10.00 per hour. What is O.K. Company's overhead application rate? O 4.55% O 45.45% O 220% O 227% O 2,200% Question 11
Highland, Inc., an engineering firm, uses a job order costing system to accumulate client−related costs. The predetermined overhead allocation rate is 40% of staff labor cost. The work by engineers is charged to jobs at a rate of $33 per staff labor hour. A recent job for a client used 75 staff labor hours. How much was the total job cost? A. $2,475 B. $990 C. $30 D. $3,465
XYZ Company applies overhead to jobs using direct labor cost as an activity. For the current year, XYZ Company's estimated overhead was $600,000 based on an expected 50,000 direct labor hours to be worked, with direct laborers expected to be paid $6 per hour. For the current year, XYZ's actual overhead costs totaled $620,000 and actual direct labor cost totaled $325,000. For the current year, overhead was: O under-applied by $20,000 O over-applied by $22,000 O under-applied by $30,000 over-applied by $20,000 O under-applied by $22,000 O over-applied by $30,000 none of the above choices are correct
Melinda Corporation estimates its factory overhead based on direct labor hours. Melinda estimates FOH to be $1,750,000 and direct labor hours to be 500,000. Actual information is as follows: Sales Direct Labor Advertising Expense...... Indirect Materials. Direct Materials ************** $1,234,000 432,000 145,000 1,210,000 252,000 Indirect Labor 400,000 Depreciation Expense - Factory 185,000 Direct labor hours........... 510,000 (a) Calculate the predetermined overhead rate and calculate the overhead applied during the year. Show Journal Entry (b) Determine the amount of over- or underapplied overhead and state whether it was under or overapplied. Prepare the journal entry to eliminate the over- or underapplied overhead.
Nova Company's total overhead cost at various levels of activity are presented below: Total Overhead Cost $ 210,600 $ 184,200 $ 237,000 $ 263,400 Month April May June July Machine-Hours 50,000 40,000 60,000 70,000 Assume the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 40,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 56,000 60,000 68,200 $ 184,200 Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $263,400 of overhead cost in July was maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $263,400 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs.) 2. Using the high-low method, estimate a cost formula for maintenance in the form Y = a + bx. 3.…
Crosshill Company's total overhead costs at various levels of activity are presented below: Total Overhead. Cost $201,000 $178,500 $223,500 $246,000 Month April May June July Machine-Hours 70,000 60,000 80,000 90,000 Assume that the overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 60,000-machine-hour level of activity in May is as follows: Utilities (variable). Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 51,000 21,000 106,500 $178,500 The company wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $246,000 of overhead cost in July was maintenance cost. (Hint: To do this, first determine how. much of the $246,000 consisted of utilities and supervisory salaries. Think about the behaviour of variable and fixed costs within the relevant range.) (Round the "Variable cost per unit" to 2 decimal places.)