Exercise 2-13 (Algo) Departmental Predetermined Overhead Rates [L02-1, L02-2, L02-4] White Company has two departments, Cutting and Finishing. The company uses ajoborder costing system and
Exercise 2-13 (Algo) Departmental Predetermined Overhead Rates [L02-1, L02-2, L02-4] White Company has two departments, Cutting and Finishing. The company uses ajoborder costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machinehours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Cutting Finishing Direct laborhours 6,600 86,000 Machinehours 67,100 2,600 Total fixed manufacturing overhead cost $ 380,000 $ 506,000 Variable manufacturing overhead per machine-hour S 2.00 Variable manufacturing overhead per direct labor-hour $ 4.75 Required: 1. Compute the predetermined overhead rate for each department. 2. The job cost sheet for Job 203, which was started and completed during the year, showed the following: Department Cutting Finishing Direct laborhours 4 20 Machine-hours 82 5 Direct materials $ 760 $ 380 Direct labor cost $ 100 $ 500 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. 3. Would you expect substantially different amounts of overhead cost to be assigned to somejobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates? Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required 3 Compute the predetermined overhead rate for each department. (Round your answers to 2 decimal places.) Predetermined overhead rate ___' per DLH Required 2 > Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required 3 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. (Round your intermediate calculations and nal answer to 2 decimal places.) ( Required1 Required3 > Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required 3 Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates? Yes ONO
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