Question
Show complete solution, please. ABC Leather Works, which manufactures saddles and other leather goods, has three departments. The Assembly Department manufactures various leather products, such
Show complete solution, please.
ABC Leather Works, which manufactures saddles and other leather goods, has three departments. The Assembly Department manufactures various leather products, such as belts, purses, and saddlebags, using automated production process. The Saddle Department produces handmade saddles and uses very little machinery. The Tanning Department produces leather. The tanning process requires little in the way of labor or machinery, but it does require space and process time. Due to the different production processes in the three departments, the company uses three different cost drivers for the application of manufacturing overhead. The cost drivers and overhead rates are the following. How much is the applied manufacturing overhead in the Assembly Department for Job No. 20?
Cost Driver Tanning Department Square feet of leather Assembly Department Machine time Saddle Department Direct-labor time Predetermined Overhead Rate P3 per square-foot P9 per machine hour P4 per direct labor hour The company's deluxe saddle and accessory set consists of handmade saddle, two saddlebags, a belt, and a vest, all coordinated to match. The entire set uses 100 square feet of leather from the Tanning Department, 3 machine hours in the Assembly Department, and 40 direct-labor hours in the Saddle Department. The company is processing Job No. 20 consisting of 20 deluxe saddle and accessory setsStep by Step Solution
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