PROBLEM 13-A1______

Donald Aeronautics Company uses a budgeted overhead rate in applying overhead to products on a machine-hour basis for Department A and on a direct-labor-hour basis for Department B. At the beginning of 20X1, the company’s management made the following budget predictions:

Department A Department B Direct-labor cost $1,500,000 $1,200,000 Factory overhead $2,170,000 $1,000,000 Direct-labor hours 90,000 125,000 Machine hours 350,000 20,000

Cost records of recent months show the following accumulations for product M89:

Department A Department B Material placed in production $12,000 $32,000 Direct-labor cost $10,800 $10,000 Direct-labor hours 900 1,250 Machine hours 3,500 150

Required:

1. What is the budgeted overhead rate that should be applied in Department A? In Department B?

2. What is the total overhead cost of product M89?

3. If 200 units of product M89 are produced, what is their unit cost?

4. At the end of 20X1, actual results for the year’s operations were as follows:

Department A Department B Actual overhead costs incurred $1,600,000 $1,200,000 Actual direct-labor hours 80,000 120,000 Actual machine hours 300,000 25,000

Find the underapplied or overapplied overhead for each department and for the factory as a whole.

Instructions:

1. Review the printed template called Problem 13-A1 that follows these instructions. In some problems, some of the problem data have been entered for you in the data input section of the spreadsheet. PROBLEM 13-A1 Continued

2. There are 11 FORMULAS in the template that you need to provide to complete your analysis. Using the spaces provided below, write the formulas where requested in the template.

FORMULA 1 ______FORMULA 7 ______

FORMULA 2 ______FORMULA 8 ______

FORMULA 3 ______FORMULA 9 ______

FORMULA 4 ______FORMULA 10 ______

FORMULA 5 ______FORMULA 11 ______

FORMULA 6 ______

3. Click the Excel icon from the program manager screen to start the spreadsheet program. Click on the Open File SmartIcon/Button to retrieve the template for the problem. Then enter the 11 FORMULAS where indicated on the template.

4. Click the Save File SmartIcon/Button to save your work.

5. Click the Print Button to print your work.