Metal Fabricating has two departments that all goods pass through: machining and assembly. Estimated data on each
Question:
Metal Fabricating has two departments that all goods pass through: machining and assembly. Estimated data on each department for 2020 were as follows:
Machining | Assembly | |
Budgeted Overhead | $1,200,000 | $580,000 |
Budgeted Direct Labour Hours | 30,000 | 20,000 |
Budgeted Machine Hours | 80,000 | 20,000 |
Actual Overhead | $1,210,000 | $600,000 |
Actual Direct Labour hours | 28,000 | 25,000 |
Actual Machine hours | 85,000 | 18,000 |
1). Compute the departmental overhead rates.
2) Using departmental rates compute the amount of over-applied or under-applied manufacturing overhead for each department for 2020.
Metal Fabricating manufactured 20 shelving units for a local auto repair shop. The cost sheetcontained the following information:
| Machining | Assembly | |
Direct materials | 40000 | 45000 | |
Direct labour | 16000 | $8000 | |
Machine hours | 600 | 900 | |
Direct labour hours | 240 | 700 |
3)Compute the selling price for the auto repair shop if the markup is 40% (5 marks)
4) Why would a company use departmental rates.