Rafner Manufacturing identified the following budgeted data in its two production departments.Assembly$1,267,20012,700 DLH6,700 MHFinishing$ 670,00020,700 DLH16,700 MHManufacturing overhead costsDirect labor hoursMachine hoursRequired:1. What is the company's single plantwide overhead rate based on direct labor hours?2. What is the company's single plantwide overhead rate based on machine hours?

Plantwide overhead rate based on direct labour hours = Assembly department manufacturing overheads /…

Answered: 1. What is the company's single…

1. What is the company's single plantwide overhead rate based on direct labor hours? 2. What is the company's single plantwide overhead rate based on machine hours?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 7EB: A company estimates its manufacturing overhead will be $840,000 for the next year. What is the...

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Rafner Manufacturing identified the following budgeted data in its two production departments.
Assembly
$1,267,200
12,700 DLH
6,700 MH
Finishing
$ 670,000
20,700 DLH
16,700 MH
Manufacturing overhead costs
Direct labor hours
Machine hours
Required:
1. What is the company's single plantwide overhead rate based on direct labor hours?
2. What is the company's single plantwide overhead rate based on machine hours?

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A company estimates its manufacturing overhead will be $840,000 for the next year. What is the predetermined overhead rate given each of the following Independent allocation bases? Budgeted direct labor hours: 90,615 Budgeted direct labor expense: $750000 Estimated machine hours: 150,000
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