Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The

White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Cutting Finishing Direct labor-hours 6,000 30,000 Machine-hours 48,000 5,000 Total fixed manufacturing overhead cost $ 264,000 $ 366,000 Variable manufacturing overhead per machine-hour $ 2.00 Variable manufacturing overhead per direct labor-hour $ 4.00 Required: 1. Compute the predetermined overhead rate for each department. 2. The job cost sheet for Job 203, which was started and completed during the year, showed the following: Department Cutting Finishing Direct labor-hours 6 20 Machine-hours 80 4 Direct materials $ 500 $ 310 Direct labor cost $ 108 $ 360 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plant wide predetermined overhead rate based on direct labor-hours, rather than using departmental rates?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Auditing E4 Im

Authors: KNAPP

4th Edition

0324048602, 978-0324048605

More Books

Students also viewed these Accounting questions

Question

Create an arbitrage strategy in the case when CP>S0KerT

Answered: 1 week ago

Question

Define procedural justice. How does that relate to unions?

Answered: 1 week ago