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M Ugly Unintelligent Limited has three departments - (1) Plush Cat; (2) Framing; and (3) Fridge. The company uses a job-order costing system. The company
M Ugly Unintelligent Limited has three departments - (1) Plush Cat; (2) Framing; and (3) Fridge. The company uses a job-order costing system. The company management - led by 'Not Very Smart Aussie' Mitchell - have decided for the coming year (that is, 3021) that predetermined overhead rates will be determined at the department level. The Plush Cat Department will base its pre-determined rate on direct labour hours; the Framing Department on direct moulding machine hours; and the Fridge Department will base its pre-determined rate on direct stuffing machine hours. At the beginning of the year, the company made the following total estimates of expected production, and production costs: Department Plush Cat Framing Fridge Direct Labour Hours 76,000 10,000 2,000 Direct Stuffing Machine Hours Direct Moulding Machine Hours 1,000 1,000 54,000 12,000 1,500 61,000 Total Fixed Manufacturing Overhead Cost Total Variable Manufacturing Overhead per Labour Hour $460,000 $810,000 $260,000 $5.00 $5.00 $5.00 MacBook 80 F3 F4 F5 sa F7 F6 DI FB DD FO FL # $ % A ) 3 & 7 3 4 * 00 5 E o 6 V - 0 A 0 W b 90 E R T Y 3 O E Co: " U o E up nr. A S >> D F G H . J X L J J O LO X C C V B i NL n 5
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