Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Estimated cost and operating data for three companies for the upcoming year follow: Company X Y Z Direct labour-hours 80,000 45,000 60,000 Machine-hours 30,000 125,000
Estimated cost and operating data for three companies for the upcoming year follow:
Company | |||
X | Y | Z | |
Direct labour-hours | 80,000 | 45,000 | 60,000 |
Machine-hours | 30,000 | 125,000 | 21,000 |
Direct materials cost | $400,000 | $290,000 | $300,000 |
Manufacturing overhead cost | $536,000 | $520,000 | $480,000 |
Page 130
Predetermined overhead rates are computed using the following bases in the three companies:
Company | Overhead Rate Based On |
X | Direct labour-hours |
Y | Machine-hours |
Z | Direct materials cost |
Required:
- Compute the predetermined overhead rate to be used in each company during the upcoming year.
- Assume that Company X works on three jobs during the upcoming year. Direct labour-hours recorded by job are as follows: job 418, 18,000 hours; job 419, 26,000 hours; job 420, 38,000 hours. How much overhead cost will the company apply to work in process for the year? If actual overhead costs total $530,000 for the year, will overhead be under- or overapplied? By how much?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started