should the single plantwide rate for job 450 overcost or under cost? and what about job 455?
Homework: Chapter 4 Homework (required) Save Score: 0.82 of 1 pt 1 of 7 (7 complete) HW Score: 97.4%, 6.82 of 7 pts 2x E4-19A (similar to) Question Help Evan's Fine Furnishings manufactures upscale custom furniture. Evan's currently uses a plantwide overhead rate based on direct labor hours to allocate its $1,070,000 of manufacturing overhead to individual jobs. However, Diana Burger, owner and CEO, is considering refining the company's costing system by using departmental overhead rates. Currently, the Machining Department incurs $630,000 of manufacturing overhead while the Finishing Department incurs $440,000 of manufacturing overhead. Diana 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. (Click the icon to view the job information.) Read the requirements. Requirement 1. Compute the plantwide overhead rate assuming that Evan's expects to incur 21,400 total DL hours during the year. First identify the formula, then compute the rate. (Round your answer to the nearest whole dollar.) Cost allocation base (estimated) Plantwide overhead rate Total manufacturing overhead 1,070,000 - = 21,400 $ 50 Requirement 2. Compute departmental overhead rates assuming that Evan's expects to incur 15,000 MH in the Machining Department and 17,600 DL hours in the Finishing Department during the year. First identify the formula, then compute the rate for each department. (Round your answers to the nearest whole dollar.) Total department overhead 630,000 Cost allocation base (estimated) 15,000 Departmental = overhead rate = $ 42 per mach. hour = $ 25 per DL hour Machining $ Finishing 440,000 17,600 Requirement 3. If Evan's continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455? Requirement 3. If Evan's continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455? First identify the formula, then calculate the amount of manufacturing overhead that would be allocated to the jobs if the plantwide overhead rate is used. (Round your answers to the nearest whole dollar.) Plantwide overhead rate X Actual use of allocation base = Manufacturing overhead allocated 350 50 Job 450 Job 455 50 350 Requirement 4. If Evan's uses departmental overhead rates, how much manufacturing overhead would be allocated to Job 450 and Job 455? Use the following table to calculate the amount of manufacturing overhead that would be allocated to the jobs if the departmental overhead rates are used. (Round your answers to the nearest whole dollar.) Job 450 84 $ Machining Finishing Job 455 294 125 150 50 234 $ 419 Total overhead allocation Requirement 4. If Evan's uses departmental overhead rates, how much manufacturing overhead would be allocated to Job 450 and Job 455? Use the following table to calculate the amount of manufacturing overhead that would be allocated to the jobs if the departmental overhead rates are used. (Round your answers to the nearest whole dollar.) Machining Job 450 84 $ 150 Job 455 294 125 Finishing 234 $ 419 Total overhead allocation Requirement 5. Based on your answers to Requirements 3 and 4, does the plantwide overhead rate overcost or undercost either job? Explain. If Evan's sells its furniture at 125% of cost, will its choice of allocation systems affect product pricing? Explain. The single plantwide rate Job 450 by $ 116 and Job 455 by $ 69. the input fields and then click Check Answer. Choose from any list or ente overcosts undercosts
