Fixed costs: Administration $ 63,450 $ 65,500 Rent $ 65,317 $ 63,904( Points: 25) 10.( TCO H) Lindon Company uses 10,000 units of Part Y each year as a component in the assembly of one of its products. The company is presently producing Part Y internally at a total cost of $ 100,000 as follows. Direct materials............................................... $ 20,000 Direct labor...................................................... 40,000 Variable manufacturing overhead...................... 16,000 Fixed manufacturing overhead....................... 24,000 Total costs....................................................... 100,000 An outside supplier has offered to provide Part Y at a price of $ 10 per unit. If Lindon stops producing the part internally, one third of the fixed manufacturing overhead would be eliminated. 11.( TCO B) Wahr Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor hours for the upcoming year at 35,000. The estimated variable manufacturing overhead was $ 7.25 per labor hour and the estimated total fixed manufacturing overhead was $ 585,000. The actual labor hours for the year turned out to be 33,000. ================================================== ACCT 505 Final Exam
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Actual Costs Incurred Static Budget
Activity level( in units) 5,250 5,178 Variable costs: Indirect materials $ 24,182 $ 23,476 Utilities $ 22,356 $ 22,674
Fixed costs: Administration $ 63,450 $ 65,500 Rent $ 65,317 $ 63,904( Points: 25) 10.( TCO H) Lindon Company uses 10,000 units of Part Y each year as a component in the assembly of one of its products. The company is presently producing Part Y internally at a total cost of $ 100,000 as follows. Direct materials............................................... $ 20,000 Direct labor...................................................... 40,000 Variable manufacturing overhead...................... 16,000 Fixed manufacturing overhead....................... 24,000 Total costs....................................................... 100,000 An outside supplier has offered to provide Part Y at a price of $ 10 per unit. If Lindon stops producing the part internally, one third of the fixed manufacturing overhead would be eliminated. 11.( TCO B) Wahr Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor hours for the upcoming year at 35,000. The estimated variable manufacturing overhead was $ 7.25 per labor hour and the estimated total fixed manufacturing overhead was $ 585,000. The actual labor hours for the year turned out to be 33,000. ================================================== ACCT 505 Final Exam
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