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1.Capati Corporation is working on its direct labor budget for the quarter. Each unit of output requires 0.41 direct labor-hours. The direct labor rate is $12.50 per direct labor-hour. The production budget calls for producing 2,300 units in June, 2,350 units in July and 2,800 units in September. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 960 hours in total each month even if there is not enough work to keep them busy.
Required: Using the template
a. Calculate the total direct labor cost for the quarter if the company follows its no lay-off policy, but pays time-and-a-half for every hour worked in excess of 960 hours in a month?
2.Mccoo Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $1.50 per direct labor-hour. The company’s budgeted fixed manufacturing overhead is $25,900 per month, which includes depreciation of $6,900 per month. All other fixed manufacturing overhead costs represent current cash flows. Budgeted sales for June are $500,000, July $600,000 and August $700,000, based on an average selling price of $25.00 per unit, with the corresponding production budget showing 20,000 units in June, 24,000 units in July and 28,000 in August. The direct labor budget for the quarter indicates a labor rate of 0.40 per unit.
Required: Using the template
a. Determine the cash disbursement for manufacturing overhead for the quarter.
b. Determine the predetermined overhead rate for the quarter.
3.Kassabian Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system:
Wages and salaries $440,000
Distribution of resource consumption:
Activity cost pools
Total other setting up Assembly
100% 20% 30% 50% Wages and salaries
100% 40% 40% 20% Depreciation
100% 40% 35% 25% Utilities
How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity cost pool?
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4.Glendale Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data:
Wages and Salaries 314,000
Resources are consumed as follows
Activity Cost Pools
Assembly Setting Up Other Total
Depreciation 30% 20% 50% 100%
Utilities 20% 40% 40% 100%
Wages and salaries 40% 45% 15% 100%
How much total cost would be allocated to the Assembly cost pool?
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