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What’s your favorite Disney movie of all time? Why? Also in that movie identify an example of Direct Labor, Direct Material and Manufacturing Overhead in a Disney Movie Studio project. Identify a Fixed Cost and a Variable Cost. 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? Give an example of Actual Manufacturing Overhead cost elements in the production and distribution of a Disney movie. Do you think the concept of WIP applies for Disney movie production and distribution activities?
Expert Answer
Cars is my favorite Disney movie.
As it shows how with desire and determination world can be conqured, how to be responsible of own action.
Direct Labor: Animation work of the animators
Direct Material: The material used to build the road of the sets
Manufacturing Overhead : The Animation software and PCs
Identify a Fixed Cost: The PCs and softwares licensed.
Variable Cost: Salary of the animators
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?
Most appropriate is machine hours, as the base is dependent on both the hours of operation but only with the corresponding machine, rest hours are not used and hence the overhead should not be shared. And Dollars are not directly related to activity done, but on complexity which may or may not include the overhead component at all, hence Machine hours is the most suitable.
Give an example of Actual Manufacturing Overhead cost elements in the production and distribution of a Disney movie.
The movie prints which are purchased and sent to each distributor is an overhead. More so the licensing or distribution contracts.
Do you think the concept of WIP applies for Disney movie production and distribution activities?
Yes, the animation creation, editing and voice over all are WIP.
