Ch. 4- Activity 1: Job cost with Departmental Overhead rates Neta Corporation has the following 2 departments: Assembly Department Machining and Painting Department Total Total Budgeted Overhead (MOH) $500,000 $2,000,000 Budgeted DL Hours (DLH) 200,000 50,000 $2,500,000 250,000 Budgeted Machine Hours (MH) 20,000 120,000 140,000 The assembly department is more labor intensive, while the Machining and Painting Department has more equipment and thus higher maintenance, power consumption, depreciation, and set-up costs. Therefore, using department rates, the Assembly Department would use DLH to allocate its overhead while the Machining and Painting department would use MH. 1. Compute the pre-determined MOH Rate for the PLANT assuming that the company assigns all MOH based on DLH. $2,500,000 Total MOH/250,000 Total DLHS = $10/DLH 2. Compute the pre-determined overhead rates for the Assembly department and the Machining and Painting Department. Assembly Dept.: 2,500,000/200 12,500 Mach. & Paint Dept.: 2,500,000/2,000,000=1.25 The company has Job #13 with the following information: Assembly Department Machining and Painting Department Total Total Job # 13 (14,400 units) Prime Costs (DM+DL) $100,000 $20,000 $120,000 Direct Labor Hours 5,000 1,000 6,000 Machine Hours 200 500 700 3. Using plantwide overhead rates, develop a per-unit cost for job #13. Prime Costs +MOH Applied =Total Job Costs Divide by # of Units Per Unit Cost 4. Using departmental overhead rates, develop a per-unit cost for the job #13. Prime Costs + MOH Applied Assembly