Question
Ch. 4 Ford Motor Company has two production departments, Fabrication and Assembly. Suppose that Ford uses a job order costing system (they don't really,
Ch. 4 Ford Motor Company has two production departments, Fabrication and Assembly. Suppose that Ford uses a job order costing system (they don't really, but suppose anyway). The budgeted manufacturing costs for the year are as follows: Fabrication Assembly Direct materials $750,000 $100,000 Direct manufacturing $500,000 $500,000 labor Manufacturing $1,000,000 $800,000 overhead The actual material and labor costs charged to Job # 855 were as follows: Total Direct materials: $24,000 Direct labor: Fabrication Dept Assembly Dept $7000 $9000 $16,000 Applied manufacturing overhead costs for Ford is applied to jobs on the basis of direct manufacturing labor cost using departmental pre-determined overhead rates (POHR or budgeted manufacturing overhead rates) which were determined at the beginning of the year.
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