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Category > Management Posted 03 Nov 2017 My Price 9.00

Rochester Heating Systems, Inc.

Rochester Heating Systems, Inc. calculates its predetermined overhead rate on a quarterly basis. The following estimates were made for the current year.

 

 

(LO 3-4)

 

Manufacturing

Direct-Labor

Overhead Rate

2. May, total cost: $1,140

5. February, total cost:

 

First quarter ..................................................

Overhead

$  400,000

 

Hours

50,000

(per direct-labor ho

?

$1,117.80

Second quarter .............................................

320,000

 

32,000

?

 

Third quarter  ................................................

200,000

 

25,000

?

 

Fourth quarter  ..............................................

280,000

 

28,000

?

 

Total

$1,200,000

 

135,000

 

 
 

Pricing

Estimated

 

Estimated

 

Quarterly  Predetermined

 

 

 

ur)

 

 

 

 

The firm’s main product, part number SC71, requires $600 of direct material and 20 hours of direct labor per unit. The labor rate is $17 per hour.

 

Required:

 

1.      Calculate the firm’s quarterly predetermined overhead rate for each quarter.

 

2.      Determine the cost of one unit of part number SC71 if it is manufactured in February versus May.

 

3.      Suppose the company’s pricing policy calls for a 10 percent markup over cost. Calculate the price to be charged for a unit of part number SC71 if it is produced in February versus May.

 

4.      Calculate the company’s predetermined overhead rate for the year if the rate is calculated annually.

 

5.      Based on your answer to requirement (4), what is the cost of a unit of part number SC71 if it is manufactured in February? In May?

 

6.      What is the price of a unit of part SC71 if the predetermined overhead rate is calculated annually?

 

 

 

 

 

Answers

Maurice Tutor
(5)
Status NEW Posted 03 Nov 2017 06:11 PM My Price 9.00

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