Author Question: Euphoria Company has two departments, X and Y. Overhead is applied based on direct labor cost in ... (Read 131 times)

TFauchery · **on:** Jul 5, 2018

Euphoria Company has two departments, X and Y. Overhead is applied based on direct labor cost in Department X and machine-hours in Department Y. The following additional information is available:

Budgeted Amounts Department X Department Y
Direct labor cost 180,000 165,000
Factory overhead 225,000 200,000
Machine-hours 51,000 mh 40,000 mh

Actual data for Job 25 Department X Department Y
Direct materials requisitioned 15,000 18,000
Direct labor cost 11,000 14,000
Machine-hours 5,000 mh 3,000 mh

Required:
a. Compute the budgeted factory overhead rate for Department X.
b. Compute the budgeted factory overhead rate for Department Y.
c. What is the total overhead cost of Job 25?
d. If Job 25 consists of 50 units of product, what is the profit per unit if selling price is 2,000 per unit?
e. What is the proportion of the direct labor cost incurred with respect to the total cost of the job?
f. Should the company go ahead with this job?

Question 2

Decision-making is an activity of the
a. management process
b. operations process
c. information process
d. organization process

momtoalll · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

Answer:
a. 225,000/180,000 = 125
b. 200,000/40,000 hrs. = 5.00 per hour
c. (11,000 125 percent) + (5.00 3,000 hrs.) = 28,750
d. 15,000 + 18,000 + 11,000 + 14,000 + 28,750 = 86,750/50 units =1,735 per unit is the total cost per unit. Thus profit is 2,000 1,735 = 265 per unit.
e. 25,000 / 86,750 = 28.82
f. Yes, the company must accept this job as it earns a profit of 265 per unit.

Answer to Question 2

A