Question
Pokemon company has two producing departments: machining and finishing. The company has been using a plant-wide predetermined overhead rate based on direct labor cost. The
Pokemon company has two producing departments: machining and finishing. The company has been using a plant-wide predetermined overhead rate based on direct labor cost. The following estimates were made for the current year
MACHINING FINISHING TOTAL
| Manufacturing overhead | $140,000 | $60,000 | $200,000 |
| Direct labor cost | $100,000 | $300,000 | $400,000 |
| Machine hours | 10,000 | 5,000 | 15,000 |
a. What is budgeted factory overhead rate based on direct labor cost.
b. Calculate separate departmental overhead rates based upon direct labor cost for assembly and machine hours for finishing.
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Audit Risk Assessment Made Easy Seeing What Others Miss
Authors: Charles Hall
1st Edition
0578961679, 978-0578961675
