Rivera Company Manufactured Two Products, a and B, During April

question 39

Essay

Rivera Company manufactured two products, A and B, during April.For purposes of product costing, an overhead rate of $2.00 per direct-labor hour was used, based on budgeted annual factory overhead of $500,000 and 250,000 budgeted annual direct-labor hours, as follows: $\begin{array}{lrr}&\text { Budgeted }&\text { Budgeted }\\&\text { Overhead }&\text { Hours }\\\text { Department 1 } & \$ 300,000 & 200,000 \\\text { Department 2 } & 200,000 & 50,000\\&\$500,000&250,000\end{array}$ The number of labor hours required to manufacture each of these products was: $\begin{array}{ccc}&\text { Product A }&\text { Product B }\\\text { In Department 1 } & 3 & 1 \\\text { In Department 2 } & {1} & 3 \\\text { Total } & {3}&{4}\end{array}$ During April, production units for products A and B were 1,000 and 3,000, respectively.
Required:
(1) Using a plantwide overhead rate, what are total overhead costs assigned to products A and B, respectively?
(2) Using departmental overhead rates, what are total overhead costs assigned to products A and B, respectively?
(3) Assume that materials and labor costs per unit of Product B are $10 and that the selling price is established by adding 40% of total costs to cover profit and selling and administrative expenses.What difference in selling price would result from the use of departmental overhead rates?

Evaluate the impact of government policies and economic factors on the loanable funds market.

Interpret diagrams and tables related to loanable funds to determine equilibrium interest rates and quantities.

Understand the relationship between investment decisions and interest rates.

Identify the sources of loanable funds and their impact on the market.

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Definitions:

Budgeted Production

The planned amount of goods to be produced over a certain period, often based on demand forecasts.

Estimated Inventory

Estimated inventory represents a company's approximation or forecast of the inventory it has, which can be used for planning, budgeting, or as part of the inventory valuation process.

Production Budget

A financial plan that estimates the number of units to be produced to meet the sales goals and inventory needs.

Cassette Recorders

Electronic devices used for recording audio onto a magnetic tape housed in a cassette.