Question
Custom Auto Parts manufactures parts to order for antique cars. Custom Auto Parts makes everything from fenders to engine blocks. Each customer order is treated
Custom Auto Parts manufactures parts to order for antique cars. Custom Auto Parts makes everything from fenders to engine blocks. Each customer order is treated as a job. The company currently has two jobs, No.9823 and No. 9824, that are complete, although overhead has not yet been applied. The company wants to know what each job's cost would be under alternative overhead allocation rates based on: (1) direct labor cost, (2) direct labor hours, and (3) machine hours. Estimates for this year are as follows:
Depreciation on machinery accounts for 75 percent of the overhead costs. The job-cost sheets show:
Job Costs Using Different Overhead Rates
Required
A) Determine the overhead allocation rate under the three suggested allocation bases. Round to two decimal places.
B) Calculate the cost of Job 9823 and Job 9824 using each of the three bases. Round to nearest dollar.
C) Discuss which allocation base appears preferable.
*** Atention*** PLEASE INCLUDE ALL THE CALCULATINS OF THE PROBLEMS. THANK
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