Use the following information for question 5 to 8 Brown\'s Fishing Company manuf
ID: 2600655 • Letter: U
Question
Use the following information for question 5 to 8 Brown's Fishing Company manufactures and sells three styles of fishing rods-Bass, Dome and Water. Each type of rod is made in 1000-umit batches. The following additional data apply: PER UNIT data: Selli Direct materials Direct labor BASS S40 S 8 $15 30,000 50,000 DOME S20 S 4 S 3 WATER $30 S 8 s 9 40,000 ected sales in units Hours per 1000-unit batch: Direct labor hours Machine hours Setup hours ME 40 25 30 10 25 0.5 20 on hOLTS 30 20 Total overhead costs and activity levels for the year are estimated as follows: ctivity Direct labor hours Machine hours Se Inspections verhead costs Activity levels 2,900 hours 2.400 hours 95 setup hours ction hours $465.500 2.700 5) Using a traditional costing system, overhead costs are allocated based on budgeted direct labour hours and budgeted overhead costs. What is the budgeted overhead rate per labour hour (round to 0 decimal points)? A) $ 300 B) S 363 C) S322 D) None of the above 6) Using a traditional costing system, what is the profit per unit for each rod? (round to 0 decimal places) A) S 17, S13, S13 for Bass, Dome and Water respectively B) S5, S 10, S4 for Bass, Dome and Water respectively C) S20, S 13, S 13 for Bass, Dome and Water respectively D) None of the above 7) If the company used ABC for overhead allocation, what would be the overhead rates for setups and inspections? A) S 160.52 per setup hour, S 150 per inspection hour B) S4,900 per setup hour, S 150 per inspection hour C) S 4,900 per inspection hour, S 150 per setup hour D) None of the above 8) Using ABC for overhead allocation, what would be the profit for each type of rod? A) S 32.40, S 12.45, $24.90 for Bass, Dome and Water respectively B) S 7.60, $7.55, S5.10 for Bass, Dome and Water respectively C) S 17, S 13, S13 for Bass, Dome and Water respectively D) None of the aboveExplanation / Answer
5. answer: A) $300
Working :
6) Answer: B) $5, $10, $4 for Bass, Dome and water respectively
Working Notes:
7) Answer : B) $4900 per setup hour and $150 per inspection hour
Working notes
8) Answer: B) $7.60, $7.55 and $5.10 for Bass, Dome and Water respectively
Working notes:
Particulars workings amount Setup cost $465500 Inspection cost $405000 total overhead cost $870500 Total direct labor hours (30000x0.04)+(50000x0.01)+(40000x0.03) 2900 hours Budgeted overhead rate per labor hour $300.1724 or $300