Freeze Frame,Inc Freeze Frame's Total Expected Overhead Costs and Related Overhead Data

question 135

Essay

Freeze Frame,Inc.produces cameras that require three processes,A,B,and C,to complete.Digital camera model #789 is the best-selling of all the many types of cameras produced.Information related to the 550,000 units of digital camera model #789 produced annually is shown below:
$$\begin{array} { | l | r | } \hline \text { Direct materials } & \$ 450,000 \\\hline \text { Direct Labor } & \\\hline \text { Department A } ( 7,000 \text { DLL } \times \$ 21 \text { per DLH } ) & \$ 147,000 \\\hline \text { Department B } ( 25,000 \text { DLH } \times \$ 19 \text { per DLH) } & \$ 475,000 \\\hline \text { Department C } ( 10,000 \text { DLHH } \times \$ 26 \text { per DLH) } & \$ 260,000 \\\hline \text { Machine Hours } & \\\hline \text { Department } A & 42,000 \mathrm { MH } \\\hline \text { Department B } & 23,000 \mathrm { MH } \\\hline \text { Department C } & 38,000 \mathrm { MH } \\\hline\end{array}$$
Freeze Frame's total expected overhead costs and related overhead data are shown in the following table:
$$\begin{array} { | l | r | r | r | } \hline & \text { Department A } & \text { Department B } & \text { Department C } \\\hline \text { Direct labor hours } & 90,000 \mathrm { DLH } & 75,000 \mathrm { DLH } & 42,000 \mathrm { DLH } \\\hline \text { Machine hours } & 67,500 \mathrm { MH } & 135,000 \mathrm { MH } & 53,200 \mathrm { MH } \\\hline \begin{array} { l } \text { Manuffacturing overhead } \\\text { costs }\end{array} & \$ 540,000 & \$ 675,000 & \$ 399,000 \\\hline\end{array}$$
a.Compute a departmental overhead rate for department A based on machine hours.
b.How much overhead is associated with model 789 from department A?
c.Compute a departmental overhead rate for department B based on direct labor hours.
d.How much overhead is associated with model 789 from department B?
e.Compute a departmental overhead rate for department C based on machine hours.
f.How much overhead is associated with model 789 from department C?
g What is the per unit cost of the 550,000 units of model 789?

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Definitions:

Contingent Liabilities

Possible liabilities that depend on the outcome of a future event, not recognized as liabilities on the balance sheet unless both probable and measurable.

Pre-acquisition Equity

Refers to the equity interest in a company that exists before it is acquired by another entity.

Post-acquisition Equity

The equity interest in a subsidiary held by the parent company after accounting for any changes since the acquisition date.

Accounting Policies

The particular standards, foundations, norms, regulations, and methods used by an organization to compile and display its financial records.