StudentShare solutions
Triangle menu

Analyzing Direct Costs - Essay Example

Nobody downloaded yet

Extract of sample
Analyzing Direct Costs

And lastly, Quality Control and Testing has a labor rate of $10.00. When multiplied by the projected 500 labor hours this give you a total of $5,000. Adding the totals of these five jobs together we have $3,625 + $16,400 + $11,250 + $6,750 + $5,000, which is an estimated total labor cost of 43,025. I then divided this total by the total projected labor hours of 5000 to come up with the weighted average cost of $8.61 (rounded up). The direct manufacturing labor cost objective (Question 2) would be this weighted average time projected hours which is a cost objective of $43,015. To estimate the material cost for the Far-Out Products task (Question 1), I took the proposed labor hours figure of 1800 and multiplied by the $41 simple average, which comes from the total material dollars expended divided by the total labor hours for the last five projects, for a total of $73,800. Using the regression analysis (Question 2), I put the 1800 labor hours into the equation, which was determined as $24,117 + $25.74 multiplied by the labor hours. and the estimate I came up with was $70,449. To answer Question 3, the first estimate appears more accurate in relation to the data from past projects. This could be due to the fact that the r2 of .988 is not necessarily a perfect fit for the regression model, since the r2 does not equal 1, though it is very close to 1. I would use the first estimate because it is based on the average of the last five projects. In the Material Sampling case, since the item is overpriced by $20,000 (Question 1), I reduced the estimate of $620,000 for the 20 high-cost items down to $600,000. And because the sample of the other 480 items is overpriced by 6 percent (Question 2), I took the total of $180,200 and added a 106% increase, giving a total of $191,012. So the estimate for total material cost (Question 3) would be $600,000 plus $191,012; which is a total material cost estimate of $791,012. Even with the 106% increase for the 480 smaller items, this estimate is still less than the original estimate $800,200. This is because the one high-cost item was overpriced by $20,000. For the DeLoan Corporation, the 6-month moving average estimated scrap rate (Question 1) equals scrap for the month divided by material for the month. Dividing these for each month gives you 5.5% for February + 6.09% for March + 6.19% for April + 6.52% for May + 6.02% for June + 5.72% for July. We don’t have to factor in the January scrap rate since that was 7 months ago and we are only concerned with the last six months. So dividing these percentages by 6, we come up with a 6-month moving average scrap rate of 6.0133%. Using this scrap rate to figure out how much total product is needed if the finished product is $90,000 (Question 2), I took 106.0133%, which is 100% plus the rate calculated from question 1, and multiplied it by that $90,000, coming up with a total material estimate of $95,412 (rounded up). To answer Question 3, yes this is a reasonable estimate since it is based on the average scrap metal rate of the previous six months and one could expect that the actual number will be close to this estimate. FIFO stands for First-In, First-Out, meaning that inventory is calculated as first-come, first-serve. The product that is produced first goes out first using this method. For the Mason Inventory data, the FIFO inventory value charged (Question 1) would be the first value listed, which is $10. I took this rate and multiplied it ...Show more
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Analyzing Direct Costs Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/66869-lesson
(Analyzing Direct Costs Essay Example | Topics and Well Written Essays - 750 Words)
https://studentshare.net/finance-accounting/66869-lesson.
“Analyzing Direct Costs Essay Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.net/finance-accounting/66869-lesson.
  • Cited: 0 times

Summary

Cost Accounting Questions To find the weighted-average direct manufacturing labor rate for the Perry Products data (Question 1), I multiplied each labor weight by the projected hours. The team leader has a total labor rate of $14.50 multiplied by 250 hours, which equals $3,625…
Analyzing Direct Costs
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Analyzing Direct Costs"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Analyzing the Reasons for Investing Abroad
Such aspects include the country’s recent history, the form of external and internal demands and/or problems confronted by the government, the disintegration or solidarity of the local community on the aspect of religion and culture, the extent of public order or disorder, the existing political structure, and the mindset of the government of the host country (Peng 2010, 181-183).
8 pages (2000 words) Essay
Analyzing
This can be attested to by the consistent reduction in the graduation rates and consistent poor test results across many public schools. Moreover, the United States has begun experiencing the impact of low performance since most American graduates cannot be employed and the nation has to depend on graduates from Europe and Asian countries.
3 pages (750 words) Essay
Planning and Controlling Direct Labor Costs
..…….………4 Conclusion……………………………………………………………………...…….………7 References……………………………………………………………………………..……..8 Introduction One of the issues commonly discussed in most boardrooms is the need to cut costs.
6 pages (1500 words) Essay
Costs
To manage a business successfully, the manager should make plans both in the short run and strategic perspectives. The business manager has to understand the various types of cost and their behavior in the short run and long run and hence this essay. Long run has been defined as that period of time in which all the factors of production are variable, but the state of technology is fixed(Jocelyn, 80).
6 pages (1500 words) Essay
Factors that affect Foreign Direct Investment
Factors that affect foreign direct investments inflow and outflow are wide and relate to both domestic and international levels of economies. Objectives of FDIs are mostly to
60 pages (15000 words) Essay
From a decision making point of view, why are some costs relevant and others irrelevant Give a detailed example of each
Sunk costs and future costs are inevitable and they do not vary among alternatives. When analyzing alternatives therefore, it is important for a business organization to differentiate between relevant and irrelevant costs. This is
1 pages (250 words) Essay
Government price analysis of direct and indirect costs
This paper aims to discuss some of the issues underlying with direct and indirect costs during their analysis process. Governmental analysis for direct and indirect cost is
1 pages (250 words) Essay
Lesson 16 - Analyzing Direct Costs
The rates in Question 1 are different from the rates in Question 3 because the actual amounts have changed. The actual factory overhead amount for both question 1 and question 3 are different. Likewise, the actual hours for both the direct labor hours
4 pages (1000 words) Essay
Analyze the companys cost structure (e.g., variable vs. fixed costs, manufacturing vs. non-manufacturing costs, direct vs. indirect costs, job costing or process costing, etc) for starbucks
Fixed costs on the other hand, are expenses the company incurs whether they make coffee or not. For example if they don’t sell a cup of coffee, they
2 pages (500 words) Essay
Costs
Mixed cost illustration Discretionary fixed costs ordinarily refer to short term fixed costs whose occurrence is due to decisions devised by a given firm’s management
1 pages (250 words) Essay
Comments (0)
Click to create a comment
Let us find you another Essay on topic Analyzing Direct Costs for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us