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Bergeron's Fine Furnishings manufactures upscale custom furniture. Bergeron's currently uses a plantwide overhead rate based on direct labor hours to allocate its $1,000,000 of manufacturing
Bergeron's Fine Furnishings manufactures upscale custom furniture. Bergeron's currently uses a plantwide overhead rate based on direct labor hours to allocate its $1,000,000 of manufacturing overhead to individual jobs. However, Diedra Burger, owner and CEO, is considering refining the company's costing system by using departmental overhead rates. Currently, the Machining Department incurs $660,000 of manufacturing overhead while the Finishing Department incurs $340,000 of manufacturing overhead. Diedra has identified machine hours (MH) as the primary manufacturing overhead cost driver in the Machining Department and direct labor (DL) hours as the primary cost driver in the Finishing Department. (Click the icon to view the job information.) Read the requirements First identify the formula, then calculate the amount of manufacturing overhead that would be allocated to the jobs if the plantwide overhead rate is used. (Round your answers to the nearest whole dollar.) Manufacturing overhead allocated X More Info Job 450 Job 455 X Requirement 4. If Bergeron's uses departmental overhead rates, how much manufacturing overhead would be allocated to Job 450 and Job 455? Use the following table to calculate the amount of manufacturing overhead that would be allocated to the jobs if the departmental overhead rates are used. (Rd The Bergeron's plant completed Jobs 450 and 455 on May 15. Both jobs incurred a total of 5 DL hours throughout the entire production process. Job 450 incurred 2 MH in the Machining Department and 4 DL hours in the Finishing Department (the other DL hour occurred in the Machining Department). Job 455 incurred 7 MH in the Machining Department and 3 DL hours in the Finishing Department (the other two DL hours occurred in the Machining Department). Job 450 Job 455 Machining Finishing Total overhead allocation Print Done Requirement 5. Based on your answers to Requirements 3 and 4, does the plantwide overhead rate overcost or undercost either job? Explain. If Bergeron's sens its turmure a 120 70 or CUST, WIITES Choice or allocation systems allect produce pricing? Explain. The single plantwide rate Job 450 by $ and Job 455 by $ Since Bergeron's sets its sales price at 125% of cost, and the job cost is V by the allocation system it uses, its sales price will by the allocation system it uses
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