Question
I do not need the answers to questions 1 part a or b. It is already calculated below. PLEASE SHOW ALL CALCULATIONS FOR 3-A AND
I do not need the answers to questions 1 part a or b. It is already calculated below. PLEASE SHOW ALL CALCULATIONS FOR 3-A AND 3-B
1-a.
Predetermined overhead rate = Estimated total overhead / Estimated total direct labor hours
Predetermined overhead rate = $567,600 / 51,600 = $11 per direct labor hour.
1-b.
Predetermined overhead rate (Framing) = Estimated overhead cost / Estimated machine hours
Predetermined overhead rate (Framing) = $400,000 / 160,000 = $2.5 per machine hour
Predetermined overhead rate (Finishing) = Estimated overhead cost / Estimated direct labor hours
Predetermined overhead rate (Finishing) = $167,600 / 41,900 = $4 per direct labor hour
G.A. Courtney & Sons build homes. Each home is considered a job; costs are accumulated by job to determine the final cost of a home. The company builds two types of homes. Standard models are framed at factory using high-tech machinery and take little direct labor to complete. Custom homes are framed and finished at the building site using mostly direct labor and few machine hours. Annual estimates for each department follow:
Framing | Finishing | Total | |
Total Overhead | $400,000 | $167,600 | $567,600 |
DLH | 9,700 | 41,900 | 51,600 |
MH | 160,000 | -0- | 160,000 |
During the year, five jobs were started and completed. Jobs #101 and #103 were custom homes. The remaining jobs were standard models. Direct materials (DM), direct labor (DL), direct labor hours (DLH), and machine hours (MH) for each job follow:
DM | DL | Framing DLH | Finishing DLH | Total DLH | MH | |
Job #101 | $364,000 | $280,000 | 1,000 | 19,000 | 20,000 | 500 |
Job #102 | 90,000 | 100,000 | 2,800 | 500 | 3,300 | 46,500 |
Job #103 | 455,000 | 350,000 | 600 | 20,890 | 21,490 | 1,600 |
Job #104 | 144,000 | 160,000 | 2,100 | 800 | 2,900 | 52,000 |
Job #105 | 127,800 | 142,000 | 3,200 | 710 | 3,910 | 59,400 |
Total | $1,180,800 | $1,032,000 | 9,700 | 41,900 | 51,600 | 160,000 |
REQUIRED:
(1) Calculate the predetermined overhead rate (POR) using:
(a) A single, plantwide cost pool and DLH as the application base.
(b) Separate total overhead amounts for each department (one total for framing and one for finishing). Use MH as the application base for framing and DLH for finishing.
(3) Use the following format to calculate:
(a) The total costs of each job using the two departmental (framing and finishing) PORs (from (1)(b) above).
(b) The total costs of all jobs using the two departmental (framing and finishing) PORs (from (1)(b) above)
Note: the totals line item at the bottom of the table satisfy this requirement.
|
DM |
DL | Framing OH | Finishing OH | Total |
Job #101 | $xxx | $xxx | $xxx | $xxx | $xxx |
Job #102 | xxx | xxx | xxx | $xxx | xxx |
Etc |
|
|
|
|
|
Totals | $xxx | $xxx | $xxx | $xxx | $xxx |
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