Hairco makes and sells hair products at an awesome salon. Thehair products are made of aloe, gel, and tea tree oil. Given thefollowing information about Hairco’s January operations, answer thequestions below. Budgeted MOH: $800 per month. Budgeted MachineHours (Hairco’s chosen allocation base for MOH): 200.
Inventory Balances 1/1 1/31
Hair Products $ 1000 1200
Aloe 50 65
Partly-mixed hair products 400 385
Gel 300 280
Tea Tree Oil 450 620
During January, Hairco bought 200 ounces of aloe at $0.75 perounce, 6000 ounces of gel at $0.50 per ounce, and 800 ounces of teatree oil for $3 an ounce. The machines were used 190 hours. It alsoincurred the following costs.
Depreciation on machines $30 per month
Depreciation on tools $10 per month
Cashier in store 40 hours a week at $12 per hour for 4 weeks
Rent on factory $150 per month
Factory custodian 10 hours per week at $8 per hour for 4weeks
Utilities for factory $200 per month + $0.05 per kilowatthour.
Shampoo mixer 40 hours per week (4 weeks) at $10 per hour
Categorize the inventory items listed above.
Categorize each of the costs listed above as Direct Materials,Direct Labor, Manufacturing Overhead or Period (Nonmanufacturing)cost AND as fixed or variable.
Hairco sold $15,000 worth of hair products in January. Create anincome statement for the month. Like many companies, Hairco usesactuals for DM & DL, and the Budgeted MOH rate to calculateMOH.
In March, Hairco gets its utility bill (2000 kilowatt hours wereused) for January, the last of its MOH costs for that month. Howmuch is Hairco’s MOH over or under-applied? What are its optionsfor disposing of this amount?
Show all these.
