Business, 05.02.2020 11:51 kadenhisgen
Wixis cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods. the company uses a job-order costing system. the capacity of the plant is determined by the capacity of its constraint, which is time on the automated bandsaw that makes finely beveled cuts in wood according to the preprogrammed specifications of each cabinet. the bandsaw can operate up to 180 hours per month. the estimated total manufacturing overhead cost at capacity is $14,760 per month. the company bases its predetermined overhead rate on capacity, so its predetermined overhead rate is $82 per hour of bandsaw use. the results of a recent month’s operations appear below: sales $ 43,740 beginning inventories $ 0 ending inventories $ 0 direct materials $ 5,350 direct labor $ 8,860 manufacturing overhead incurred $ 14,760 selling and administrative expense $ 8,180 actual hours of bandsaw use 150 required: 1-a. prepare an income statement that records the cost of unused capacity on the income statement as a period expense. 1-b. how much of the cost of unused capacity can be shown on the income statement as a period expense?
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Wixis cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods. the co...
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