Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

OUESTION 4 (10 MARKS) Earthware Company makes a range of pottery products to sell to the major departmental stores. The company uses a normal job-order

image text in transcribed
OUESTION 4 (10 MARKS) Earthware Company makes a range of pottery products to sell to the major departmental stores. The company uses a normal job-order costing system and applies manufacturing overhead to jobs using a plantwide overhead rate based on machine hours. At the beginning of the year, Earthware Company has the following estimates: Required: (a) Compute the plantwide overhead rate for the company. (2 marks) (b) What was the amount of underapplied or overapplied overhead if the actual manufacturing overhead cost at the end of the year was $1,308,800 and actual machine hours was 85,430 ? ( 2 marks) 3 (c) The newly hired accountant suggested using departmental rates to assign overheads to jobs. The rate in the Moulding Department can be based on machine hours and the rate in the Painting Department can be based on direct labour hours. Compute the departmental overhead rates for the two departments and briefly comment on whether this is a good suggestion. (6 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting For Executives And MBAs

Authors: Ferris & Wallace

2nd Edition

1934319627, 978-1934319628

More Books

Students also viewed these Accounting questions