Free solved Fill in the blanks Estimate manufacture overhead for the year is $300,000.


Screenshot 2024 01 09 161749

Screenshot 2024 01 09 161749

Step 1 of 3

In the problem, the estimated overhead for the year is given for $300,000, direct labour hour for 150,000, machine hours for 8,900and direct labour dollars$3,000,000.

the predetermined overhead rate based on machine hours, labour hours and direct labour dollar, is to be determined. and also determine the net income and break even sales.

Explanation:

on the basis of given information or data, the predetermined overhead rate for machine hour, labour hours and direct labour dollar is to be calculated. and the net income and break even sales is also be determined.

 

Step 2 of 3

1)

A)

To calculate the predetermined overhead rate based on machine hours, the estimated manufacturing overhead would divide by the machine hours.

Predetermined Overhead Rate (Machine Hours)= Estimated Manufacturing OverheadMachine hours

Machine hours = 8,900

the estimated overhead for the year is given = $300,000

Predetermined Overhead Rate (Machine Hours) =$300,0008,900

Predetermined Overhead Rate (Machine Hours) = 33.70or34 per machine Hour

B)

Predetermined overhead rate based on direct labor hours would determined by dividing the estimated manufacturing overhead by the direct labor hours :

Predetermined Overhead Rate (Labour Hours) =Estimated manufacturing overheadDirect labor hours

Direct labor hours = 150,000

Estimated manufacturing overhead =$300,000

Predetermined overhead rate= $300,000150,000

Predetermined overhead rate = 2 per labour hour

  1. C)

Predetermined overhead rate based on direct labor dollars would calculated by dividing the estimated manufacturing overhead by the direct labour dollars.

Predetermined overhead rate =Estimated manufacturing overheadDirect labor dollars

Direct labor dollars = $3,000,000

Estimated manufacturing overhead =$300,000

Predetermined overhead rate = ($300,000$3,000,000)×100

Predetermined overhead rate= 10%

 

2)

Sales for Peach corporation is given for = $500,000

Total expenses = $300,000

Net income would calculated by subtracting the total expenses from the sales .

Net income =Sales−total expenses

Net income =$500,000−$300,000

Net income = $200,000

Explanation:

The predetermined overhead rate based on machine hours is calculated by dividing the estimated manufacturing overhead by the machine hours and predetermined overhead rate based on direct labor hours is determined by dividing the estimated manufacturing overhead by the direct labor hours whereas Predetermined overhead rate based on direct labor dollars is calculated by dividing the estimated manufacturing overhead by the direct labour dollars. And Net income is calculated by subtracting the total expenses from the sales .

 

 

Step 3 of 3

3) Break even sales would calculated by dividing the total fixed costs by the contribution margin ratio.so to calculate the break even sales, firstly calculate the contribution margin ratio.

contribution margin ratio is calculated by subtracting the total variable costs from sales and the outcome value would be divide by the sales.

Contribution Margin ratio = Sales−Variable costssales

sales = $500,000

variable costs =$100,000

Contribution Margin ratio =$500,000−$100,000500,000

Contribution margin ratio = 0.8

And the fixed cost can be computed by subtracting the total variable cost from the total expenses.

Total fixed cost = Total expenses – Total variable costs

TotalFixedcos⁡t=$300,000−$100,000

Total fixed cost =$200,000

Now Break – even sales is computed as :

Break -even sales =Total fixed costcontribution margin

Break even sales = $200,0000.8

Break even sales =$250,000

Explanation:

Break even sales is calculated by dividing the total fixed costs by the contribution margin ratio.so to calculate the break even sales, firstly calculated the contribution margin ratio.

contribution margin ratio is calculated by subtracting the total variable costs from sales and the outcome value would be divide by the sales.

 

Final solution

1)

  1. a) Predetermined Overhead Rate (Machine Hours) = 33.70or34 per machine Hour
  2. b) Predetermined overhead rate = 2 per labour hour
  3. c) Predetermined overhead rate= 10%

2 ) Net income is calculated as $200,000

3) Break even sales is $250,000

 

 

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