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4.Domino Bakery has the following budget at 1,000,000 dozen donuts

Question : 4.Domino Bakery has the following budget at 1,000,000 dozen donuts : 1416221

 

4.Domino Bakery has the following budget at 1,000,000 dozen donuts baked:

 

Direct materials$300,000

Direct labor250,000

Variable factory overhead200,000

Fixed factory overhead180,000

$930,000

 

(1)Compute the cost per dozen donuts at 1,000,000 dozen.

(2)Develop the budget for 1,200,000 dozen donuts.

(3)Compute the cost per dozen donuts at 1,200,000 dozen.

(4)Explain why the difference in the cost per dozen occurs at the different levels of volume.

5.Dean Corporation has two service departments, Power and Maintenance, and two production departments, Painting and Polishing.  The following data have been estimated for next year’s operations:

Department:Direct Charges Kilowatt Hours Used  Square Footage

Power$450,00020,00010,000

Maintenance120,00050,0005,000

Painting235,000100,00030,000

Polishing265,000150,00020,000

 

Requirements:

(1)   a)For which service department would you use kilowatt hours to allocate service costs.

b)For which service department would you use square footage to allocate service costs.

(2)Distribute the service department costs using the direct distribution method.

(3)Prepare the journal entries to distribute the costs of the service departments to the production departments given the results of your calculations.

 

 

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