Allocating overhead to jobs. Hamilton Inc., uses a job system of cost accounting.

The data presented here relate to operations in its plant during January.

Hamilton, Inc.. has two product departments and one service department. The actual factory overhead costs during the month are $8,000. At the end of the month Mr.

Hamilton allocates overhead costs as follows: Department A, $4,200; Department B,

$3,200, Department C, $600. He allocates the service department (Department C)

overhead of $600 as follows: two-thuds to Department A, one-third to Department B.

Mr. Hamilton applies factory overhead to jobs at the predetermined rales of 50 percent of direct labor costs in Department A and 75 percent in Department B. The firm delivers the jobs upon completion. The firm completed job nos. 789, 740, and 791 in January. Jobs 788 and 792 are still in process on January 31.

a. Complete the job production record in the following table by filling in the appropriate amounts. Be sure to show supporting calculations. (Job 788 has been done for you.)

b. For Departments A and B. compute the difference between the applied overhead using the predetermined rates and the actual overhead after allocating Department C overhead to Departments A and B.

Transcribed Image Text:

Job Production Record Applied Direct Labor Direct Matl. Overhead Job Order No. Jobs in Process, Jan. 1 Dept. Dept. A B Dept. Dept. Dept. Dept. A B A B Total Costs Jobs in Process Jan. 31 Completed Jobs 788 $2,400 $ 600 $ 400 $ 500 $ 300 $300 $300 $4,800 $4,800 $ 789 1,700 1.200 600 900 600 790 1.600 791 800 2.000 1.200 1.200 1.100 700 900 792 2.400 1,600 1,800 800 Totals $4,100 $7,800 $4,600 $5,500 $3,300