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Practice midterm 1 Spring 2021 (1).pdf 15 K0 Inc. has two departments and uses a plant-wide predetermined overhead rate (POHR) using direct labor cost (DLC)
Practice midterm 1 Spring 2021 (1).pdf 15 K0 Inc. has two departments and uses a plant-wide predetermined overhead rate (POHR) using direct labor cost (DLC) as the allocation base to apply manufacturing overhead to the company's jobs. The owner of the company considers switching to departmental predetermined overhead rates that are based on direct labor hours (DLHs) in Dept. A and machine-hours (MI-Is) in Dept. B. Note that actual direct labor cost per hour is S 12. At the beginning of the year, the company made the following estimates: Estimates Dept: A Direct labor costs (DLC) $ 26,000 5 Direct labor hours (DLl-Is) 2,000 Machine-hours (MHs) 1,800 Manufacturing overhead 5 34,600 3 Assuming the information below for the two jobs, what is the impact on job #22 of using departmental predetermined overhead rates? (Do not round any intermediate calculations. Round the nal answer to the nearest whole dollars.) I Actual results: Dept. A Job # 12 DLHs 260 MI-Is 140 Job #22 DLHs 160 MHs 220 A. Applied manufacturing overhead will be $2702 lower. B. Applied manufacturing overhead will be $272 lower. C. Applied manufacturing overhead will be $37060 lower. ELI-3 13,700 1,200 3,200 44,800
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