Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products. Manufacturing overhead costs are allocated on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department. At the beginning of 20X3, the following estimates were provided for the coming year: Machining Assembly Direct labor-hours 30,000 60,000 Machine-hours 80,000 20,000 Direct labor cost $500,000 $900,000 Manufacturing overhead costs $420,000 $240,000 The accounting records of the company show the following data for Job #316: Machining Assembly Direct labor-hours Machine-hours Direct labor cost 120 70 60 5 $300 $200 $400 Manufacturing overhead costs $100 For Bauer Manufacturing, what is the annual manufacturing overhead cost-allocation rate for the Machining Department? a. $4.00 b. $4.20 c. $4.67 d. $5.25

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 16P: Rockford Company has four departmental accounts: Building Maintenance, General Factory Overhead,...
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Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing
overhead costs to products. Manufacturing overhead costs are allocated on the basis of
machine-hours in the Machining Department and on the basis of direct labor-hours in the
Assembly Department. At the beginning of 20X3, the following estimates were provided for
the coming year:
Machining Assembly
Direct labor-hours
30,000
60,000
Machine-hours
80,000
20,000
Direct labor cost
$500,000 $900,000
Manufacturing overhead costs $420,000 $240,000
The accounting records of the company show the following data for Job #316:
Machining Assembly
Direct labor-hours
Machine-hours
Direct labor cost
120
70
60
5
$300
$200
$400
Manufacturing overhead costs $100
For Bauer Manufacturing, what is the annual manufacturing overhead cost-allocation rate
for the Machining Department?
a. $4.00
b. $4.20
c. $4.67
d. $5.25
Transcribed Image Text:Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products. Manufacturing overhead costs are allocated on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department. At the beginning of 20X3, the following estimates were provided for the coming year: Machining Assembly Direct labor-hours 30,000 60,000 Machine-hours 80,000 20,000 Direct labor cost $500,000 $900,000 Manufacturing overhead costs $420,000 $240,000 The accounting records of the company show the following data for Job #316: Machining Assembly Direct labor-hours Machine-hours Direct labor cost 120 70 60 5 $300 $200 $400 Manufacturing overhead costs $100 For Bauer Manufacturing, what is the annual manufacturing overhead cost-allocation rate for the Machining Department? a. $4.00 b. $4.20 c. $4.67 d. $5.25
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