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The Eastern Seaboard Company uses an estimated rate for allocating the manufacturing overhead to job orders based on machine hours for the machining department and
The Eastern Seaboard Company uses an estimated rate for allocating the manufacturing overhead to job orders based on machine hours for the machining department and on a direct labour hour basis for the finishing department. The company budgeted the following for last year: During December, the cost record for job 602 shows the following: Required: a) What is the estimated overhead allocation rate for both departments? Marks 30 b) What is the total overhead allocated to job 602? Marks 20 c) Assuming that job 602 consisted of 200 units of product, what is the unit cost for this job? Marks 30 d) What factors affect the volume of production in a period? Can we figure out all the factors before the start period? Why? Marks 10 e) Explain why the company would use two different allocation bases. Marks 10
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