Assume a company has two manufacturing departments - Assembly and Fabrication. The company considers all of its manufacturing overhead costs to be fixed costs. The first set of data below is budgeted data for the company as a whole that was estimated at the beginning of the year. The second set of data below is actual data for the company as a whole that was derived at the end of the year. The third set of data relates to one particular job completed during the year-Job Z Budgeted Data Manufacturing overhead costs Direct labor hours Machine hours Actual Data Manufacturing overhead costs Direct labor hours Machine hours Multiple Choice ο ο ο ο $54.42 Job Z Direct labor hours Machine hours Assume the company uses departmental predetermined overhead rates. It uses direct labor-hours as the allocation base in Assembly and machine-hours as the allocation base in Fabrication. How much manufacturing overhead would be applied from the Fabrication Department to Job 2? $54.00 $56.00 Assembly $ 300,000 25,000 10,000 $53.20 Assembly $ 330,000 27,000 10,500 Fabrication $ 400,000 15,000 50,000 Assembly 10 hours 1 hour Fabrication $ 380,000 16,000 48,000 Fabrication 2 hours 7 hours
Assume a company has two manufacturing departments - Assembly and Fabrication. The company considers all of its manufacturing overhead costs to be fixed costs. The first set of data below is budgeted data for the company as a whole that was estimated at the beginning of the year. The second set of data below is actual data for the company as a whole that was derived at the end of the year. The third set of data relates to one particular job completed during the year-Job Z Budgeted Data Manufacturing overhead costs Direct labor hours Machine hours Actual Data Manufacturing overhead costs Direct labor hours Machine hours Multiple Choice ο ο ο ο $54.42 Job Z Direct labor hours Machine hours Assume the company uses departmental predetermined overhead rates. It uses direct labor-hours as the allocation base in Assembly and machine-hours as the allocation base in Fabrication. How much manufacturing overhead would be applied from the Fabrication Department to Job 2? $54.00 $56.00 Assembly $ 300,000 25,000 10,000 $53.20 Assembly $ 330,000 27,000 10,500 Fabrication $ 400,000 15,000 50,000 Assembly 10 hours 1 hour Fabrication $ 380,000 16,000 48,000 Fabrication 2 hours 7 hours
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Assume a company has two manufacturing departments - Assembly and Fabrication. The company considers all of its manufacturing overhead costs to be fixed costs. The first set of data below is budgeted data for the company as a whole that was estimated at the beginning of the year. The second set of
data below is actual data for the company as a whole that was derived at the end of the year. The third set of data relates to one particular job completed during the year- Job Z.
Budgeted Data
Manufacturing overhead costs
Direct labor hours
Machine hours
Actual Data
Manufacturing overhead costs
Direct labor hours
Machine hours
Job Z
Direct labor hours
Machine hours
Multiple Choice
$54.42
$54.00
$56.00
Assembly
$ 300,000
25,000
10,000
$53.20
Assembly
$ 330,000
27,000
10,500
Assume the company uses departmental predetermined overhead rates. It uses direct labor-hours as the allocation base in Assembly and machine-hours as the allocation base in Fabrication. How much manufacturing overhead would be applied from the Fabrication Department to Job Z?
Assembly
10 hours
1 hour
Fabrication
$ 400,000
15,000
50,000
Fabrication
$ 380,000
16,000
48,000
Fabrication
2 hours
7 hours
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