Perreth Products manufactures its products in two separate departments: Machining and Assembly. Total manufacturing overhead costs for the year are budgeted at $1,100,000 Of this amount, the Machining Department incurs $680,000 (primarily for machine operation and depreciation) while the Assembly Department incurs $420,000. The company estimates that it will incur 10,000 machine hours (all in the Machining Department) and 22,000 direct labor hours (8,000 in the Machining Department and 14,000 in the Assembly Department) during the year. (Click the icon to view the additional information.) Read the requirements. x Plantwide allocation rate Overhead allocation Requirement 5. Compute the total amount of overhead allocated to each job if the company uses departmental overhead rates Overhead allocation-Machining Department Overhead allocation-Assembly Department Job 500 Job 501 Total overhead allocation Requirement 6. Do both of the allocation systems accurately reflect the resources each job used? Explain. The single plantwide overhead rate assigned the used. This seems of overhead to both jobs. The departmental rates assign to Job 501 than Job 500 due to Rendement ? Comes de the Intal mandaturn rnet and sales nine of each inh in the remnande nment niandwirte nehaarte Rreth Time Remaining: 01:05:50 Next Of this amount, the Machining Department incurs $680,000 (primarily for machine operation and depreciation) while the Assembly Department incurs $420,000. The company estimates that it will incur 10,000 machine hours (all in the Machining Department) and 22,000 direct labor hours (8,000 in the Machining Department and 14,000 in the Assembly Department) during the year. (Click the icon to view the additional information.) Read the requirements. Requirement 3. Which job (Job 500 or Job 501) uses more of the company's resources? Explain. Job 501 uses more of the company's resources. Job 501 uses more machine hours than the other job. The accounting system should show that one job actually "costs" the company more resources than other. Requirement 4. Compute the total amount of overhead allocated to each job if the company uses its current plantwide overhead rate. Total direct labor hours Job 500 Job 501 Plantwide allocation rate Overhead allocation Requirement 5. Compute the total amount of overhead allocated to each job if the company uses departmental overhead rates. Time Remaining: 01:05:36 Next 24 tv N17406 the Perreth Products manufactures its products in two separate departments: Machining and Assembly. Total manufacturing overhead costs for the year are budgeted at $1,100,000 Of this amount, the Machining Department incurs $680,000 (primarily for machine operation and depreciation) while the Assembly Department incurs $420,000. The company estimates that it will incur 10,000 machine hours (all in the Machining Department) and 22,000 direct labor hours (8,000 in the Machining Department and 14,000 in the Assembly Department) during the year. (Click the icon to view the additional information.) Read the requirements COTD 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 1,100,000 Total direct labor hours 22,000 Requirement 2. Compute refined departmental overhead rates. Plantwide overhead rate 50 per DL hour Determining the formula, then compute the rates. (Round your answers to the nearest dollar.) Total departmental overhead cost Total departmental allocation base Departmental overhead rate Machining Assembly 680,000 420,000 8,000 . 14,000 85 per mach hou 30 per DL hour Requirement 3. Which job (Job 500 or Job 501) uses more of the company's resources? Explain Time Remaining: 01:05.29 Next Data table -X Perreth Products currently uses a plantwide overhead rate based on direct labor hours to allocate overhead. However, the company is considering refining its overhead allocation system by using departmental overhead rates. The Machining Department would allocate its overhead using machine hours (MH), but the Assembly Department would allocate its overhead using direct labor (DL) hours. The following chart shows the machine hours (MH) and direct labor (DL) hours incurred by Jobs 500 and 501 in each production department: Machining Department Assembly Department Job 500... 8MH 12 DL hours Job 501.. 5 DL hours 16 MH 12 DL hours 5 DL hours Both Jobs 500 and 501 used $1,800 of direct materials. Wages and benefits total $30 per direct labor hour. Perreth Products prices its products at 110% of total manufacturing costs. Print Done