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Exercise 2-15 Departmental Overhead Rates [LO1, LO2, LO3] Department Milling Assembly Direct labor-hours 6,500 86,000 Machine-hours 53,400 3,900 Total fixed manufacturing overhead cost $ 370,000
Exercise 2-15 Departmental Overhead Rates [LO1, LO2, LO3]
Department | ||||
| Milling | Assembly | |||
| Direct labor-hours | 6,500 | 86,000 | ||
| Machine-hours | 53,400 | 3,900 | ||
| Total fixed manufacturing overhead cost | $ | 370,000 | $ | 488,000 |
| Variable manufacturing overhead per machine-hour | $ | 2.00 | - | |
| Variable manufacturing overhead per direct labor-hour | - | $ | 3.75 | |
| Required: | |
| 1. |
|
Department | ||
| Milling | Assembly | |
| Predetermined overhead rate | $ per MH | $ per DLH |
| 2. | Assume that the overhead rates you computed in (1) above are in effect. The job cost sheet for Job 407, which was started and completed during the year, showed the following: |
Department | ||||
| Milling | Assembly | |||
| Direct labor-hours | 4 | 17 | ||
| Machine-hours | 84 | 6 | ||
| Materials requisitioned | $ | 740 | $ | 390 |
| Direct labor cost | $ | 39 | $ | 160 |
| Compute the total manufacturing cost assigned to Job 407. (Round your intermediate and final answers to 2 decimal places.) |
| Total manufacturing cost | $ |
| 3. | Would you expect substantially different amounts of overhead cost to be charged to some jobs if the company used a plantwide overhead rate based on direct labor-hours instead of using departmental rates? |
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