Euphoria Company Has Two Departments,X and Y Required:
A

question 95

Essay

Euphoria Company has two departments,X and Y.Overhead is applied based on direct labor cost in Department X and machine-hours in Department Y.The following additional information is available:
$\begin{array}{lcr}\text { Budgeted Amounts }&\text { Department } X&\text { Department } Y\\\text { Direct labor cost } & \$ 180,000 & \$ 165,000 \\\text { Factory overhead } & \$ 225,000 & \$ 200,000 \\\text { Machine-hours } & 51,000 \mathrm{mh} & 40,000 \mathrm{mh}\\\\\text { Actual data for Job \#25 }&\text { Department } X&\text { Department } Y\\\text { Direct materials requisitioned } & \$ 15,000 & \$ 18,000 \\\text { Direct labor cost } & \$ 11,000 & \$ 14,000 \\\text { Machine-hours } & 5,000 \mathrm{mh} & 3,000 \mathrm{mh}\end{array}$ Required:
a.Compute the budgeted factory overhead rate for Department X.
b.Compute the budgeted factory overhead rate for Department Y.
c.What is the total overhead cost of Job 25?
d.If Job 25 consists of 50 units of product,what is the profit per unit if selling price is $2,000 per unit?
e.What is the proportion of the direct labor cost incurred with respect to the total cost of the job?
f.Should the company go ahead with this job?

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Definitions:

Spearman Rank Correlation

A non-parametric measure of correlation that assesses the strength and direction of the association between two ranked variables, useful for ordinal data.

Pearson Correlation

A measure of the linear correlation between two variables, quantifying the degree to which they vary together.

Normal Distribution

A probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence.

Likert Scale

A psychometric scale commonly involved in research that employs questionnaires, used to represent people's attitudes or feelings on a linear scale of several options ranging from one extreme to another.