Hand In Assignment 3
Hand-In Assignment - Three
Question One
Billy Adams, controller for Westcott Inc., prepared the following budget for manufacturing costs at two different levels of activity for 2010:
DIRECT LABOUR HOURS
Level of Activity 50,000 100,000
Direct Materials $300,000 $600,000
Direct Labour 200,000 400,000
Depreciation (plant) 100,000 100,000
Subtotal $600,000 $1,100,000
MACHINE HOURS
Level of Activity 200,000 300,000
Maintaining equipment $ 360,000 $ 510,000
Machining 112,000 162,000
Subtotal $ 472,000 $ 672,000
MATERIAL MOVES
Level of Activity 20,000 40,000 Materials handling $165,000 $290,000
NUMBER OF BATCHES INSPECTED
Level of Activity 100 200
Inspecting products $ 125,000 $ 225,000
Total $1,362,000 $2,287,000
During 2009, Westcott employees worked a total of 80,000 direct labour hours, used 250,000 machine hours, made 32,000 moves, and performed 120 batch inspections.
The following actual costs were incurred:
Direct materials $440,000
Direct labour 355,000
Depreciation 100,000
Maintenance 425,000
Machining 142,000
Materials handling 232,500
Inspecting products 160,000
Westcott applies overhead using rates based on direct labour hours, machine hours, number of moves, and number of batches. The second level of activity (the far right column in the preceding table) is the practical level of activity (the available activity for resources acquired in advance of usage) and is used to compute predetermined overhead pool rates.
Required:
1. Prepare a performance report for Westcott's manufacturing costs in 2010.
2. Assume that one of the products produced by Westcott is budgeted to use 10,000 direct labour hours, 15,000 machine hours, and 500 moves and will be produced in five batches. A total of 10,000 units will be produced during the year. Calculate the budgeted unit manufacturing cost.
3.
Question One
Billy Adams, controller for Westcott Inc., prepared the following budget for manufacturing costs at two different levels of activity for 2010:
DIRECT LABOUR HOURS
Level of Activity 50,000 100,000
Direct Materials $300,000 $600,000
Direct Labour 200,000 400,000
Depreciation (plant) 100,000 100,000
Subtotal $600,000 $1,100,000
MACHINE HOURS
Level of Activity 200,000 300,000
Maintaining equipment $ 360,000 $ 510,000
Machining 112,000 162,000
Subtotal $ 472,000 $ 672,000
MATERIAL MOVES
Level of Activity 20,000 40,000 Materials handling $165,000 $290,000
NUMBER OF BATCHES INSPECTED
Level of Activity 100 200
Inspecting products $ 125,000 $ 225,000
Total $1,362,000 $2,287,000
During 2009, Westcott employees worked a total of 80,000 direct labour hours, used 250,000 machine hours, made 32,000 moves, and performed 120 batch inspections.
The following actual costs were incurred:
Direct materials $440,000
Direct labour 355,000
Depreciation 100,000
Maintenance 425,000
Machining 142,000
Materials handling 232,500
Inspecting products 160,000
Westcott applies overhead using rates based on direct labour hours, machine hours, number of moves, and number of batches. The second level of activity (the far right column in the preceding table) is the practical level of activity (the available activity for resources acquired in advance of usage) and is used to compute predetermined overhead pool rates.
Required:
1. Prepare a performance report for Westcott's manufacturing costs in 2010.
2. Assume that one of the products produced by Westcott is budgeted to use 10,000 direct labour hours, 15,000 machine hours, and 500 moves and will be produced in five batches. A total of 10,000 units will be produced during the year. Calculate the budgeted unit manufacturing cost.
3.