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ok D rences White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in
ok D rences White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Required: 1. Compute the predetermined overhead rate for each department. Department Cutting 6,000 48,000 Finishing 30,000 5,000 $264,000 $2.00 $ 366,000 $4.00 2. The job cost sheet for Job 203, which was started and completed during the year, showed the following: Direct labor-hours Machine-hours Direct materials Department Cutting Finishing 20 $500 $108 $310 8360 Direct labor cost 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 some jobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the predetermined overhead rate for each department. (Round your answers to 2 decimal places.) Cutting Department Predetermined overhead rate per MH Finishing Department per DLH Required 2>
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