In order to establish a predetermined overhead rate, you must determine an allocation base. Do you feel DL hours, DL dollars or Machine hours is most appropriate? Why?

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August 15, 2017
Critical Thinking
August 15, 2017
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In order to establish a predetermined overhead rate, you must determine an allocation base. Do you feel DL hours, DL dollars or Machine hours is most appropriate? Why?

Analyze the movie production activities involved in creating and distributing the movie. Identify the following key job costing elements (Items 1 5 below) in terms of Disney movie production and distribution activities. Give an example of each. Provide support to justify your answer as appropriate.

  1. Identify an example of Direct Labor, Direct Material and Manufacturing Overhead in a Disney Movie Studio project.
  2. Identify a Fixed Cost and a Variable Cost.
  3. In order to establish a predetermined overhead rate, you must determine an allocation base. Do you feel DL hours, DL dollars or Machine hours is most appropriate? Why?
  4. Give an example of Actual Manufacturing Overhead cost elements in the production and distributions of a Disney movie.
  5. Do you think the concept of WIP applies for Disney movie production and distribution activities?

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