Perreth Products manufactures its products in two separate departments: Machining and Assembly. Total manufacturing overhead costs...
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Perreth Products manufactures its products in two separate departments: Machining and Assembly. Total manufacturing overhead costs for the year are budgeted at $1,050,000. Of this amount, the Machining Department incurs $650,000 (primarily for machine operation and depreciation) while the Assembly Department incurs $400,000. The company estimates that it will incur 5,000 machine hours (all in the Machining Department) and 10,000 direct labor hours (2,000 in the Machining Department and 8,000 in the Assembly Department) during the year. (Click the icon to view the additional information.) Read the requirements. Requirement 1. Compute the company's current plantwide overhead rate. (Round your answer to the nearest dollar.) Begin by determining the formula, then compute the rate. Total manufacturing overhead Total direct labor hours Plantwide overhead rate 10000 105 per DL hour 1050000 Requirement 2. Compute refined departmental overhead rates. Determining the formula, then compute the rates. (Round your answers to the nearest dollar.) 13 Total departmental overhead cost + Total departmental allocation base - Departmental overhead rate 14 Machining 15 Assembly 650000 400000 5000 130 per mach hour 8000 50 per DL hour 16 Requirement 3. Which job (Job 500 or Job 501) uses more of the company's resources? Explain. 17 18 Job 501 uses more of the company's resources. Perreth Products manufactures its products in two separate departments: Machining and Assembly. Total manufacturing overhead costs for the year are budgeted at $1,050,000. Of this amount, the Machining Department incurs $650,000 (primarily for machine operation and depreciation) while the Assembly Department incurs $400,000. The company estimates that it will incur 5,000 machine hours (all in the Machining Department) and 10,000 direct labor hours (2,000 in the Machining Department and 8,000 in the Assembly Department) during the year. (Click the icon to view the additional information.) Read the requirements. Requirement 1. Compute the company's current plantwide overhead rate. (Round your answer to the nearest dollar.) Begin by determining the formula, then compute the rate. Total manufacturing overhead Total direct labor hours Plantwide overhead rate 10000 105 per DL hour 1050000 Requirement 2. Compute refined departmental overhead rates. Determining the formula, then compute the rates. (Round your answers to the nearest dollar.) 13 Total departmental overhead cost + Total departmental allocation base - Departmental overhead rate 14 Machining 15 Assembly 650000 400000 5000 130 per mach hour 8000 50 per DL hour 16 Requirement 3. Which job (Job 500 or Job 501) uses more of the company's resources? Explain. 17 18 Job 501 uses more of the company's resources.
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