Please explain the answer--I want to learn! Thank you in advance! Wings Co. budg
ID: 2771734 • Letter: P
Question
Please explain the answer--I want to learn! Thank you in advance!
Wings Co. budgeted $555,600 manufacturing direct wages, 2,315 direct labor hours, and had the following manufacturing overhead: BudgetedBudgeted Level for Cost Driver 3,200 pounds 390 setups 1,38030,000 machine hours 160 inspections Overhead Cost Driver Weight of materials Number of setups Machine hours Number of inspections Overhead Cost Pool Overhead Cost $ 160,000 13,200 Materials handlin Machine setu Machine repair Inspections 10,560 Requirements for Job #971 which manufactured 4 units of product: Direct labor Direct material:s Machine setup Machine hours Inspections 20 hours 130 pounds 30 setupsS 15.000 machine hours 15 inspections Using ABC, overhead cost assigned to Job #971 for machine setup is: $2,300 $990 $6,500 $690 $1,020 Using ABC, overhead cost assigned to Job #971 for machine repair is: $2,300 $990 $6,500 $690 $1,020Explanation / Answer
Answer.
1. Using ABC, Overhead cost assigned to Job#971 for Machine setup is
= Budgeted Machine overhead cost / Number of set up
=$13,200 / 390 = 34
= 30 * 34 = 1,020
Answer is E = $ 1,020
2. Using ABC, Overhead cost assigned to Job # 971 for Machine Repair is :
= $ 1,380 / 30,000 machine hours = $.046 per machinr hour
= $.046 * 15,000 Machine Hours = $ 690.00
Answer is D . $ 690.00
3.If Wings use a volume based overhead rate based on direct labor hours, the manufacturing overhead for Job # 971 is:
= Machine handling + Machine set up + Machine repair + Inspection / Direct labour hours
= ( $ 160,000 + $ 13,200 + $ 1,380 + $ 10,560 ) / 2,315 Budgetd hours
= ( $ 185,140 / 2,315 ) = $ 80 per direct labour hour
= $ 80 * 20 Direct labour hours = $ 1,600
Manufacturing overhead for Job # 971 is $ 1,600
Answer is C , $ 1,600