Construction Accounting And Financial Management (4th Edition)
4th Edition
ISBN: 9780135232873
Author: Steven J. Peterson MBA PE
Publisher: PEARSON
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Textbook Question
Chapter 10, Problem 7P
A construction company has total revenues of $1,150,000, total construction costs of $956,000, and general
What are the contribution margin and the contribution margin ratio for the company in Problem 5 if $15,000 of the overhead is considered variable overhead?
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A company expected its annual overhead costs to be $1,000,000 and direct labor costs to be $500,000. Actual overhead was $900,000, and actual labor costs totaled $600,000. How much is the company's predetermined overhead rate to the nearest cent?
Aaron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be
$770,000 and $500,000, respectively. Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 17,000 hours and 5,000 hours, respectively. What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.)
A.
$29.41
per labor hour
B.
$1.54
per labor hour
C.
$154.00
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D.
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A company estimated the manufacturing overhead costs for the coming year at $420,000. The total estimated direct labor hours are 15,000 hours, and the estimated machine hours to be worked are 6,000 hours. The company allocates its manufacturing overhead costs based on the direct labor hours. What is the pre-determined overhead allocation rate?
Chapter 10 Solutions
Construction Accounting And Financial Management (4th Edition)
Ch. 10 - What are some of the ways a company can increase...Ch. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - A construction company has total revenues of...Ch. 10 - A construction company has total revenues of...Ch. 10 - A construction company has total revenues of...Ch. 10 - A construction company has total revenues of...Ch. 10 - Determine the break-even volume of work for a...Ch. 10 - Determine the break-even volume of work for a...
Ch. 10 - Determine the break-even volume of work for a...Ch. 10 - Determine the break-even volume of work for a...Ch. 10 - A construction company has a fixed overhead of...Ch. 10 - A construction company has a fixed overhead of...Ch. 10 - Determine the break-even contribution margin ratio...Ch. 10 - Determine the break-even contribution margin ratio...Ch. 10 - Determine the break-even contribution margin ratio...Ch. 10 - Determine the break-even contribution margin ratio...Ch. 10 - Determine the profit and overhead markup for a...Ch. 10 - Determine the profit and overhead markup for a...Ch. 10 - Prob. 21PCh. 10 - Prob. 22P
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- Calculate the contribution margin of a product for a service company if revenues are $50,000, variable expenses are $30,000, and fixed expenses are $15,000. a.) $ 20,000 b.) $80,000 c.) $35,000 d.) $5,000arrow_forwardAaron Company estimates direct labor costs and manufacturing overhead costs for the coming year to $900,000 and $700,000, respectively. Aaron allocates overhead costs based on labor hours. the estimated total labor hours and machine hours for the coming year are 16,000 hours and 10,000 hours, respectively., What's the predetermined overhead allocation rate?arrow_forwardAaron Company estimates direct labor costs and manufacturing overhead costs for the coming year to be $800,000 and $500,000, respectively. Aaron allocates overhead costs based on labor hours. The estimated total labor hours and machine hours for the coming year are 16,000 hours and 10,000 hours, respectively. What is the predetermined overhead allocation rate?arrow_forward
- Winston Company estimates that total factory overhead for the following year will be $1,050,300. The company has decided that the basis for applying factory overhead should be machine hours, which are estimated to be 38,900 hours. The total machine hours for the year were 54,200. The actual factory overhead for the year was $1,455,000. a. Determine the total factory overhead applied. Round to the nearest dollar. b. Compute the over- or underapplied factory overhead for the year. c. Journalize the entry to transfer the over- or underapplied factory overhead to Cost of Goods Sold. If an amount box does not require an entry, leave it blank.arrow_forwardA company estimates that it has $400,000 in variable overhead costs annually and $265,000 in fixed rate overhead costs annually. Last year the variable and fixed overhead costs were $300,000 and $200,000, respectively. The firm estimates that it will have 32,500 direct labor hours this year.What is the firm’s predetermined overhead rate?arrow_forwardWinston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual factory overhead for the year was $1,375,000. Determine the over- or underapplied amount for the year. Oa. $17,500 underapplied Ob. $118,250 underapplied Oc. $17,500 overapplied Od. $118,250 overappliedarrow_forward
- Assume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked): Rent (fixed) $ 3,000 Supplies (variable) $ 4.00q Utilities (mixed) $150 + $0.75q The company’s planned level of activity was 2,000 hours and its actual level of activity was 1,870 hours. The actual amount of supplies expense for the period was $7,800. What is the activity variance for supplies expense? rev: 06_25_2020_arrow_forwardWinston Company estimates that the factory overhead for the following year will be $675,400. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 30,700 hours. The total machine hours for the year were 54,100. The actual factory overhead for the year was $1,183,000. a. Determine the total factory overhead amount applied. Round to the nearest dollar. b. Compute the over- or underapplied amount for the year. Enter the amount as a positive number. C. Journalize the entry to transfer the over- or underapplied factory overhead to cost of goods sold. If an amount box does not require an entry, leave it blank.arrow_forwardWinston Company estimates that the factory overhead for the following year will be $675,400. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 30,700 hours. The total machine hours for the year were 54,100. The actual facto overhead for the year was $1,183,000. a. Determine the total factory overhead amount applied. Round to the nearest dollar. b. Compute the over- or underapplied amount for the year. Enter the amount as a positive number. C. Journalize the entry to transfer the over- or underapplied factory overhead to cost of goods sold. If an amount box does not require an entry, leave it blank. %24arrow_forward
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