Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Calculating Departmental Overhead Rates Using Post-Allocation Costs Vairon Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.

image text in transcribed
image text in transcribed
Calculating Departmental Overhead Rates Using Post-Allocation Costs Vairon Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human General Factory Resources Fabricating Assembly $114,200 $98,000 Direct costs $165,000 $370,000 Normal activity: 70 70 Number of employees 130 Square footage 1,800 5,000 15,000 The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage, Vairon Company uses the direct method of support department cost allocation. Solve for the allocated costs to Fabricating and Assembly using the direct method of support department cost allocation. The Fabricating Department overhead rate is based on normal activity of 82,000 machine hours. The Assembly Department overhead rate is based on normal activity of 165,000 direct labor hours. Job 316 required seven machine hours in Fabricating and four direct labor hours in Assembly. Total direct materials cost $120, and total direct labor cost was $80. Required: 1. Calculate the overhead rate for Fabricating based on machine hours and the overhead rate for Assembly based on direct labor hours. If required, round your answers to the nearest cent. Use the rounded values for subsequent calculations Overhead Rate Fabricating department per mach.hr Assembly department per DLH 2. Using the overhead rates calculated in Requirement 1, calculate the cost of Job 316. If required, round your answer to the nearest cent Required: 1. Calculate the overhead rate for Fabricating based on machine hours and the overhead rate for Assembly based on direct labor hours. If required, round your answers to the nearest cent. Use the rounded values for subsequent calculations. Overhead Rate Fabricating tment per mach.hr Assembly department per DLH eing the overhead rates calculated in Requirement 1, calculate the cost of Job 316. If required, round your hver to the nearest cent. 3. What if Job 316 had required one machine hour in Fabricating and four direct labor hours in Assembly? Direct labor and direct materials costs remained the same. Calculate the new cost of Job 316. If required, round your answer to the nearest cent

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Tools For Business Decision Making

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

6th Edition

111919167X, 9781119191674

More Books

Students also viewed these Accounting questions