Question
(a) Compute the predetermined overhead rates for the Assembly and Finishing departments. (2 marks) (b) What would be the unit product cost for Job 002?
(a) Compute the predetermined overhead rates for the Assembly and Finishing departments. (2 marks)
(b) What would be the unit product cost for Job 002? Prepare the journal entry when the job was completed. (4 marks)
(c) Assume that YY Company multiplies its job costs by a markup percentage to establish its selling prices, how might plantwide overhead allocation adversely affect the company's pricing decision. (3 marks)
(d) Assume that the company closes any underapplied or overapplied manufacturing overhead directly to cost of goods sold. Prepare the journal entry. (3 marks)
(e) Briefly explain how reducing 10% of the estimated hours in both departments in calculating the predetermined overhead rates will result in a big increase in net operating income at the end of the year. (3 marks)
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