Question
Problem 2-17 (Algo) Plantwide and Departmental Predetermined Overhead Rates; Overhead Application [LO2-1, LO2-2] Wilmington Company has two manufacturing departmentsAssembly and Fabrication. It considers all of
Problem 2-17 (Algo) Plantwide and Departmental Predetermined Overhead Rates; Overhead Application [LO2-1, LO2-2]
Wilmington Company has two manufacturing departmentsAssembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is shown below is based on estimates from the beginning of the year. The second set of data relates to one particular job completed during the yearJob Bravo.
| Estimated Data | Assembly | Fabrication | Total |
|---|---|---|---|
| Manufacturing overhead costs | $ 960,000 | $ 1,200,000 | $ 2,160,000 |
| Direct labor-hours | 60,000 | 36,000 | 96,000 |
| Machine-hours | 24,000 | 120,000 | 144,000 |
| Job Bravo | Assembly | Fabrication | Total |
|---|---|---|---|
| Direct labor-hours | 13 | 5 | 18 |
| Machine-hours | 5 | 8 | 13 |
Required:
1. If Wilmington used a plantwide predetermined overhead rate based on direct labor-hours, how much manufacturing overhead would be applied to Job Bravo?
2. If Wilmington uses departmental predetermined overhead rates with direct labor-hours as the allocation base in Assembly and machine-hours as the allocation base in Fabrication, how much manufacturing overhead would be applied to Job Bravo?
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Essentials of Accounting for Governmental and Not-for-Profit Organizations
Authors: Paul A. Copley
10th Edition
007352705X, 978-0073527055
