Problem 4-46 Name:
Insert your answers in gray-shaded cells of columns D and F. If an answer
is incorrect, the word “wrong” will appear.
a. Indirect labor:
Department 1 307,000$
Department 2 262,000
Machine 1,200,000
Power 400,000
Building 1,000,000
Purchasing 100,000
Total 3,269,000$
b. DLH Overhead
Department 1 25,000
Department 2 10,000
Total 35,000 3,269,000$
Overhead per DLH 93.40$
c. Product A Product B
Direct materials 400,000$ 600,000$
Direct labor:
Department 1 300,000 75,000
Department 2 100,000 100,000
Overhead 2,335,000 934,000
Total cost 3,135,000$ 1,709,000$
÷ Number of units 10,000 10,000
Cost per unit 313.50$ 170.90$
d. Building Occupancy: $1,000,000 / 500,000 = $2 per sq. ft.
Purchasing 20,000$
Power 80,000
Department 1 400,000
Department 2 500,000
Purchasing:
Direct costs 100,000$
Allocated building occupancy 20,000
120,000$
Number of purchase orders 500
Purchasing cost per purchase order 240$
Solution
Material X 48,000
Material Y 72,000
Power:
Direct costs 400,000$
Allocated building occupancy 80,000
480,000$
Number of kilowatt hours 10,000,000
Power cost per kilowatt hour 0.048$
Department 1 72,000
Department 2 408,000
e. Product A Product B
Indirect labor:
Department 1 116,660$ 190,340$
Department 2 78,600 183,400
Power:
Department 1 24,000 48,000
Department 2 81,600 326,400
Machinery (same basis as power):
Department 1 133,333 266,667
Department 2 160,000 640,000
Building occupancy (same basis as power):
Department 1 133,333 266,667
Department 2 100,000 400,000
Purchasing:
Material X 24,000 24,000
Material Y – 72,000
Overhead cost 851,526$ 2,417,474$
f. Product A Product B
Raw material X 400,000$ 400,000$
Raw material Y – 200,000
Direct labor – Department 1 300,000 75,000
Direct labor – Department 2 100,000 100,000
Overhead (part e) 851,526 2,417,474
Total product cost 1,651,526$ 3,192,474$
÷ Number of units 10,000 10,000
Cost per unit 165.15$ 319.25$