Parr Corporation Makes Three Products,X,Y,and Z Parr Uses Direct Labor Hours as the Cost Driver to Coming

question 121

Essay

Parr Corporation makes three products,X,Y,and Z.Expected overhead costs for the coming year include: $\begin{array}{|l|r|}\hline \text { Depreciation on factory building } & \$ 140,000 \\\hline \text { Factory utility costs } & 160,000 \\\hline \text { Supervisory salaries } & 250,000 \\\hline \text { Factory supplies } & 50,000 \\\hline \text { Total } & \$ 600,000 \\\hline\end{array}$ Parr uses direct labor hours as the cost driver to allocate overhead costs.Budgeted direct labor hours for each product are:
Product X,15,000 direct labor hours
Product Y,10,000 direct labor hours
Product Z,5,000 direct labor hours
Required:
1)Determine the amount of manufacturing overhead that should be allocated to each of the three products.
2)Assume that each unit of Product X requires $40 in direct materials and 3 direct labor hours at a rate of $15 per hour.Calculate the budgeted or expected cost of each unit of X.

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Definitions:

Business Continuity

Strategies and processes designed to ensure that a business's essential functions can continue during and after a significant disruption.

Future Leaders

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Value Proposition

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