Accounting in Economics

1039 Words5 Pages
Wahr Corporation bases its predetermined overhead rate on the estimated labor hours for the upcoming year. At the beginning of the most recently completed year, the company estimated the labor hours for the upcoming year at 32,000. The estimated variable manufacturing overhead was $7.17 per labor hour and the estimated total fixed manufacturing overhead was $584,320. The actual labor hours for the year turned out to be 33,300. Required: Compute the company's predetermined overhead rate for the recently completed year Solution: Predetermined overhead rate = Estimated total fixed manufacturing overhead/ Labor hours + estimated variable manufacturing overhead = $584,320/32,000 + $7.17 = $25.43 (TCO C) Enciso Corporation is preparing its cash budget for November. The budgeted beginning cash balance is $31,000. Budgeted cash receipts total $135,000 and budgeted cash disbursements total $141,000. The desired ending cash balance is $50,000. The company can borrow up to $100,000 at any time from a local bank, with interest not due until the following month. Solution: Check excel file named solution 2 (TCO D) Mr. Earl Pearl, accountant for Margie Knall, Inc. has prepared the following product-line income data: PRODUCT Total A B C Sales................................................$ 100,000........$50,000.........$20,000...........$30,000 Variable expenses.............................. 60,000..........30,000............10,000.............20,000 Contribution margin............................. .40,000..........20,000............10,000.............10,000

More about Accounting in Economics

Open Document