Crow Company Applies Factory Overhead in Its Two Producing Departments

question 11

Essay

Crow Company applies factory overhead in its two producing departments using a predetermined rate based on budgeted machine hours in the Mixing Department and based on budgeted labor hours in the Packaging Department.Variable cafeteria costs are allocated to the producing departments based on budgeted number of employees, and fixed costs are allocated based on the capacity number of employees.Variable maintenance costs are allocated on the budgeted number of direct labor hours, and fixed costs are allocated on labor hour capacity.The data concerning next year's operations are as follows:
Required:

---

Definitions:

Insurance Premiums

Regular payments made to an insurance company to maintain insurance coverage for health, life, property, or other policies.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain range or period.

Break-even Point

The production level or sales volume at which total revenues equal total expenses, leading to no profit or loss.

Unit Variable Cost

The cost that varies with each unit produced, including direct materials and labor, but does not include fixed costs.