Question
Please see problem below and table attached. Kindly show your work. Exercise 3-39 Cost Drivers; Different Production Methods (LO 3-4, 3-5) Laramie Leatherworks, which manufactures
Please see problem below and table attached. Kindly show your work.
Exercise 3-39 Cost Drivers; Different Production Methods (LO 3-4, 3-5)
Laramie Leatherworks, which manufactures saddles and other leather goods, has three departments. The Assembly Department manufactures various leather products, such as belts, purses, and saddlebags, using an automated production process. The Saddle Department produces handmade saddles and uses very little machinery. The Tanning Department produces leather. The tanning process requires little in the way of labor or machinery, but it does require space and process time. Due to the different production processes in the three departments, the company uses three different cost drivers for the application of manufacturing overhead. The cost drivers and overhead rates are as follows:
Department Cost Driver Predetermined
Overhead Rate
Tanning Department Square feet of leather $3per square foot
Assembly Department Machine time $9per machine hour
Saddle Department Direct-labor time $5per direct-labor hour
The company's deluxe saddle and accessory set consists of a handmade saddle, two saddlebags, a belt, and a vest, all coordinated to match. The entire set uses 100 square feet of leather from the Tanning Department, 3 machine hours in the Assembly Department, and 30 direct-labor hours in the Saddle Department.
Required:
Job number DS-20 consisted of 20 deluxe saddle and accessory sets. Prepare journal entries to record applied manufacturing overhead in the W
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