Question
WoodGrain Technology makes home office furniture from fine hardwoods. The company uses a job-order costing system and predetermined overhead rates to apply manufacturing overhead cost
WoodGrain Technology makes home office furniture from fine hardwoods. The company uses a job-order costing system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Preparation Department is based on machine hours, and the rate in the Fabrication Department is based on direct labor-hours. At the beginning of the year, the companys management made the following estimates for the year:
Department | |||||||
Preparation | Fabrication | ||||||
Machine-hours | 80,000 | 40,000 | |||||
Direct labor-hours | 33,000 | 50,100 | |||||
Direct materials cost | $ | 192,000 | $ | 202,000 | |||
Direct labor cost | $ | 271,000 | $ | 513,000 | |||
Fixed manufacturing overhead cost | $ | 232,000 | $ | 470,940 | |||
Variable manufacturing overhead per machine-hour | $ | 2.40 | - | ||||
Variable manufacturing overhead per direct labor-hour | - | $ | 4.40 | ||||
|
Job 127 was started on April 1 and completed on May 12. The company's cost records show the following information concerning the job:
Department | ||||||||
Preparation | Fabrication | |||||||
Machine-hours | 370 | 69 | ||||||
Direct labor-hours | 75 | 135 | ||||||
Direct materials cost | $ | 938 | $ | 1,240 | ||||
Direct labor cost | $ | 740 | $ | 980 | ||||
|
Requred:
1. Compute the predetermined overhead rate used during the year in the Preparation Department. Compute the rate used in the Fabrication Department. (Round predetermined overhead rate to 2 decimal places.)
Preperation department: Per MH
Fabrication department: Per DLH
2. Compute the total overhead cost applied to Job 127. (Round predetermined overhead rate to 2 decimal places and round your final answer to nearest whole dollar.)
Total overhead cost:
3-a. What would be the total cost recorded for Job 127? (Round your predetermined overhead rate and intermediate calculations to 2 decimal places and round your final answer to nearest whole dollar.)
Department
Preparation Fabrication Total
Direct materials
Direct labor
Manufacturing overhead
Total cost
3-b. If the job contained 34 units, what would be the unit product cost? (Round predetermined overhead rate and final answer to 2 decimal places.)
unit product cost:
4. At the end of the year, the records of WoodGrain Technology revealed the following actual cost and operating data for all jobs worked on during the year: (Round predetermined overhead rate to 2 decimal places.)
Department | |||||||
Preparation | Fabrication | ||||||
Machine-hours | 79,800 | 24,600 | |||||
Direct labor-hours | 26,000 | 59,000 | |||||
Direct materials cost | $ | 168,200 | $ | 411,000 | |||
Manufacturing overhead cost | $ | 432,740 | $ | 777,600 | |||
|
What was the amount of underapplied or overapplied overhead in each department at the end of the year?
Preperation department:
Fabrication department:
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started