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Category > Accounting Posted 21 Sep 2017 My Price 7.00

Wisconsin Dairy

LO.4 (Analyzing mixed costs) Wisconsin Dairy determined that the total predetermined OH rate for costing purposes is $26.80 per cow per day (referred to as an animal day). Of this, $25.20 is the variable portion. Overhead cost information for two levels of activity within the relevant range are as follows:

4,000 6,000

Animal Days Animal Days

 

Indirect materials

 

$25,600

 

$38,400

Indirect labor

56,000

80,000

Maintenance

10,400

13,600

Utilities

8,000

12,000

All other

15,200

21,600

a. Determine the fixed and variable values for each of the preceding overhead items,

and determine the total overhead cost formula.

b. Assume that the total predetermined OH rate is based on expected annual capacity.

What is this level of activity for the company?

c. Determine expected overhead costs at the expected annual capacity.

d. If the company raises its expected capacity by 3,000 animal days above the present level, calculate a new total overhead rate for product costing.

Answers

Maurice Tutor
(5)
Status NEW Posted 21 Sep 2017 08:09 PM My Price 7.00

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