Please open the ATTACHMENTS and enlarge all information included. Thank you
Requirements -X 1. Compute the plantwide overhead rate assuming that Donovan expects to incur 28,000 total DL hours during the year. 2. Compute departmental overhead rates assuming that Donovan expects to incur 16,000 MH in the Machining Department and 19,000 DL hours in the Finishing Department during the year. 3. If Donovan continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455? 4. If Donovan uses departmental overhead rates, how much MOH would be allocated to Job 450 and Job 455? 5. Based on your answers to Requirements 3 and 4, does the plantwide overhead rate overcost or undercost either job? Explain. If Donovan sells his furniture at 125% of cost, will his choice of allocation systems affect product pricing? Explain. Print Done * More Info The Donovan Fine Furnishings plant completed Jobs 450 and 455 on May 15. Both jobs incurred a total of 10 DL hours throughout the entire production process. Job 450 incurred 4 MH in the Machining Department and 9 DL hours in the Finishing Department (the other DL hour occurred in the Machining Department). Job 455 incurred 6 MH in the Machining Department and 8 DL hours in the Finishing Department (the other 2 DL hours occurred in the Machining Department). Print Done Donovan Fine Furnishings manufactures upscale custom furniture. Donovan Fine Furnishings currently uses a plantwide overhead rate based on direct labour hours to allocate its $1,250,000 of manufacturing overhead to individual jobs. However, Ernie Donovan, owner and CEO, is considering refining the company's costing system by using departmental overhead rates. Currently, the Machining Department incurs $875,000 of MOH while the Finishing Department incurs $375,000 of MOH. Erie has identified machine hours (MH) as the primary MOH cost driver in the Machining Department and direct labour (DL) hours as the primary cost driver in the Finishing Department (Click the icon to view the job information.) Requirements Requirement 1. Compute the plantvide overhead rate assuming that Donovan expects to incur 28,000 total DL hours during the year. First, identify the formula, then compute the rate. (Round your answer to the nearest whole dollar.) Plantwide overhead rate Requirement 2. Compute departmental overhead rates assuming that Donovan expects to incur 16,000 MH in the Machining Department and 19,000 DL hours in the Finishing Department during the year. First, identify the formula, then compute the rate for each department. (Round your answers to the nearest whole dollar.) Department overhead rate / mach. hour Machining Finishing DL hour Requirement 3. If Donovan continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455? First, identify the formula, then calculate the amount of manufacturing overhead that would be allocated to the jobs if the plantwide overhead rate is used. (Round your interim and final answers to the nearest whole dollar.) Requirement 3. If Donovan continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455? First, identify the formula, then calculate the amount of manufacturing overhead that would be allocated to the jobs if the plantwide overhead rate is used. (Round your interim and final answers to the nearest whole dollar.) Allocated manufacturing overhead Job 450 Job 455 Requirement 4. If Donovan uses departmental overhead rates, how much MOH would be allocated to Job 450 and Job 455? Use the following table to calculate the amount of manufacturing overhead that would be allocated to the jobs if the departmental overhead rates are used. (Round your interim and final answers to the nearest whole dollar.) Job 450 Job 455 Machining Finishing Total overhead allocation Requirement 5. Based on your answers to Requirements 3 and 4, does the plantwide overhead rate overcost or undercost either of the jobs? Explain. If Donovan sells his furniture at 125% of cost, will his choice of allocation systems affect product pricing? Explain The single plantwide rate Job 450 by $ and Job 455 by $ Since Donovan sets his sales price at 125% of cost, and the job cost is by the allocation system he uses, his sales price will by the allocation system he uses. Choose from any list or enter any number in the input fields and then continue to the next
