1)The manangement of Sharrar Corporation would like toinvestigate the possibility of basing its predetermined overheadrate on activity at capacity rather than on the estimated amount ofactivity for the year. The company’s controller has providedan example to illustrate how this new system would work. Inthis example, the allocation base is machine-hours and theestimated amount of the allocation base for the upcoming year is45,000 machine-hours. In addition, capacity is 52,000 machine-hoursand the actual activity for the year is 47,100 machine-hours. Allof the manufacturing overhead is fixed and is $1,029,600 peryear. For simplicity, its assumed that this is the estimatedmanufacturing overhead for the year as well as the manufacturingoverhead at capacity and the actual amount of manufacturingoverhead for the year.
A)Determine the underapplied or overapplied overhead for the yearif the pretermined overhead rate is based on the estimated amountof the allocation base.
b) Determine the underapplied or overapplied overhead for the yearif the predetermined overhead rate is based on the amount of theallocation base capacity.
2)Fryer Corporation uses the weighted-average method in its processcosting system. this month, the beginning inventory in thefirst processing department consisted of 700 units. The costand percentage completion of these units in the beginning inventorywere:
COST Percentage Complete
materialCosts $12,600 75%
ConversionCosts $8,900 60%
A total of 7,300 units were started and 6,200 units weretransferred to the second processing department during themonth. the following costs were incurred in the firstprocessing department during the month:
Material Cost $132,200
Conversion Costs $117,500
The ending inventory was 80% complete with the respect to materialsand 45% complete with respect to conversion costs.
NOTE: To reduce rounding error, carry out all computations to atleast 3 decimal places.
The total cost transferred from the first processing department tothe next processing department during the month is closest to whatamount?
3) The following information is available on Company A:
Net Operating Income………………..$36,000
Average Operating Assets……………$180,000
Minimum Required Rate of Return……15%
What is Company A’s residula income amount? QUESTION TITLE :- The manangement of Sharrar Corporation would like to investigate