Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribed

Calculating Departmental Overhead Rates Using Post-Allocation Costs Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments Human General Resources Factory Fabricating Assembly Direct costs $180,000 $400,000 $114,200 $91,000 Normal activity: Number of employees Square footage 1,600 70 70 130 3,600 14,400 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. Valron 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 87,000 machine hours. The Assembly Department overhead rate is based on normal activity of 180,000 direct labor hours. Job 316 required eight machine hours in Fabricating and five direct labor hours in Assembly. Total direct materials cost $140, and total direct labor cost was $90. 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. employees Square footage 1,600 3,600 14,400 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. Valron 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 87,000 machine hours. The Assembly Department overhead rate is based on normal activity of 180,000 direct labor hours. Job 316 required eight machine hours in Fabricating and five direct labor hours in Assembly. Total direct materials cost $140, and total direct labor cost was $90. 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. Fabricating department Assembly department Overhead Rate per mach. hr. 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. $ 3. What if Job 316 had required two machine hour in Fabricating and five 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

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav

14th Edition

978-0132960649, 132960648, 132109174, 978-0132109178

More Books

Students also viewed these Accounting questions

Question

Obtain the z-score that has an area of 0.95 to its right.

Answered: 1 week ago