Solved: Magic Floor produces and sells a complete line of

floor

Magic Floor produces and sells a complete line of floor care products: wax strippers, floor
soaps, and floor waxes. All of these products are packaged on a new high-speed bottling fill
line. Empty bottles (pints, quarts, half gallons, or gallons) are automatically removed from their
boxes and placed on the line. The empty bottles are then filled, sealed with a foil closure,
capped with a screw, and labeled. The filled, sealed, capped, and labeled bottles go to a weigh
station to ensure each bottle has the correct amount of fill, and the non-rejected packaged
bottles are placed in boxes and a bar-coded shipping label is attached. The fill line requires
minimal direct labor once it is programmed for the bottle size, contents, and the bar-coded
labels. The decision to purchase the fill line in 2014 was justified under the assumption that the
line would run 7 hours a day, 5 days a week, and 50 weeks a year.

The 2017 budget for the fill line is:

Maintenance ............................. $ 77,000

Indirect labor ............................. 182,000

Depreciation .............................. 127,000

Utilities ..................................... 29,000

Indirect supplies .......................... 27,000

Magic Floor's 2017 budgeted production is:

Magic Floor allocates the fill line costs to the various bottled products using a predetermined
overhead absorption rate calculated based on budgeted costs divided by budgeted volume.
Budgeted volume is measured in seconds on the fill line. Pints are filled in 3 seconds, quarts in
5 seconds, half-gallons in 9 seconds, and gallons in 17 seconds.

During 2017, the following times (in seconds) were recorded for filling bottles on the fill line:

Actual overhead costs incurred in 2017 on the fill line are:

Maintenance ............................... $ 76,000

Indirect labor ............................... 179,000

Reach out to freelance2040@yahoo.com for enquiry.

 Depreciation ................................ 127,000

Utilities ....................................... 28,000

Indirect supplies ............................ 25,000

Required:

a. Calculate the expected volume of the bottling fill line for 2017.

b. Calculate the normal volume of the bottling fill line for 2017.

c. Calculate the overhead absorption rate for the bottling fill line for 2017 based on expected
volume (round overhead rate to four decimals).

d. Calculate the overhead absorption rate for the bottling fill line for 2017 based on normal
volume (round overhead rate to four decimals).

e. Calculate the over/underabsorbed overhead amount for the bottling fill line for 2017 based on
expected volume.

f. Calculate the over/underabsorbed overhead amount for the bottling fill line for 2017 based on
normal volume.

g. Explain in intuitive terms why your answers in parts (e) and (f) differ.

Magic Floor produces and sells a complete line of floor

ANSWER
https://solvedquest.com/magic-floor-produces-and-sells-a-complete-line-of-floor/

Reach out to freelance2040@yahoo.com for enquiry.

Powered by TCPDF (www.tcpdf.org)