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White Company has two departments, Cutting and Finishing. The company uses job- order costing and computes a predetermined overhead rate in each department. The Cutting
White Company has two departments, Cutting and Finishing. The company uses job- order costing 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: Direct labor-hours Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 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: Machine-hours Direct materials Direct labor cost Required 1 Department Required 2 Cutting 4 83 $ 750 $ 100 Required 3 Predetermined overhead rate Finishing 13 Using the predetermined overhead rates 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 plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates? Complete this question by entering your answers in the tabs given below. $ 380 $325 Compute the predetermined overhead rate for each department. Note: Round your answers to 2 decimal places. Cutting Cutting Department per MH Required 1 Depa 6,200 57,300 $ 370,000 $ 3.00 0 Finishing Department per DLH Required 2 >
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