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Question list Question 1 Bergeron's Fine Furnishings manufactures upscale custom furniture. Bergeron's currently uses a plantwide overhead rate based on direct labor hours to allocate
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Question
Bergeron's Fine Furnishings manufactures upscale custom furniture. Bergeron's currently uses a plantwide overhead rate based on direct labor hours to allocate its $ of manufacturing
overhead to individual jobs. However, Dede Fuller, owner and CEO, is considering refining the company's costing system by using departmental overhead rates. Currently, the Machining
Department incurs $ of manufacturing overhead while the Finishing Department incurs $ of manufacturing overhead. Fuller has identified machine hours MH as the primary
manufacturing overhead cost driver in the Machining Department and direct labor DL hours as the primary cost driver in the Finishing Department.
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Requirement Compute the plantwide overhead rate assuming that Bergeron's expects to incur total DL hours during the year.
Question
First identify the formula, then compute the rate. Round your answer to the nearest whole dollar.
Job information
The Bergeron's plant completed Jobs and on May Both jobs
incurred a total of DL hours throughout the entire production process. Job
incurred MH in the Machining Department and DL hours in the Finishing
Department the other DL hour occurred in the Machining Department Job
incurred MH in the Machining Department and DL hours in the Finishing
Department the other two DL hours occurred in the Machining Department
Requirements
Compute the plantwide overhead rate assuming that Bergeron's expects to incur total DL
hours during the year.
Compute departmental overhead rates assuming that Bergeron's expects to incur in
the Machining Department and DL hours in the Finishing Department during the year.
If Bergeron's continues to use the plantwide overhead rate, how much manufacturing overhead
would be allocated to Job and Job
If Bergeron's uses departmental overhead rates, how much manufacturing overhead would be
allocated to Job and Job
Based on your answers to Requirements and does the plantwide overhead rate overcost or
undercost either job? Explain. If Bergeron's sells its furniture at of cost will its choice of
allocation systems affect product pricing? Explain.
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