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Company A has two manufacturing departments - Department 1 and Department 2. It considers all of its manufacturing overhead costs to be fixed costs. Estimations for the begining of the year is presented in the Table 1. During the year Job 1 was started and completed. Information on Job 1 is provided in the Table 2. Table 1 Items Manufacturing overhead costs (€) Direct labour-hours Machine-hours Department 1 Department 2 Total 1600 1200 2800 100 60 160 20 80 100 Table 2 Department 1 Department 2 Total Items Direct labour-hours Machine-hours Direct materials (€) Direct labour costs (€) 55 15 70 15 30 45 320 740 1060 450 120 570 Company A uses departmental (multiple) predetermined overhead rates with direct labor - hours as the allocation base in Department 1 and machine - hours as the allocation base in Department 2. Compute the predetermined overhead rate of the Department 2.

Company A has two manufacturing departments - Department 1 and Department 2. It considers all of its manufacturing overhead costs to be fixed costs. Estimations for the begining of the year is presented in the Table 1. During the year Job 1 was started and completed. Information on Job 1 is provided in the Table 2. Table 1 Items Manufacturing overhead costs (€) Direct labour-hours Machine-hours Department 1 Department 2 Total 1600 1200 2800 100 60 160 20 80 100 Table 2 Department 1 Department 2 Total Items Direct labour-hours Machine-hours Direct materials (€) Direct labour costs (€) 55 15 70 15 30 45 320 740 1060 450 120 570 Company A uses departmental (multiple) predetermined overhead rates with direct labor - hours as the allocation base in Department 1 and machine - hours as the allocation base in Department 2. Compute the predetermined overhead rate of the Department 2.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Company A has two manufacturing departments - Department 1 and Department 2. It considers all of its manufacturing overhead costs to be fixed costs. Estimations for the begining of the year is presented in the Table 1. During the year Job 1 was started and completed. Information on Job 1 is provided in the Table 2. Table 1 Items Manufacturing overhead costs (€) Direct labour-hours Machine-hours Department 1 Department 2 Total 1600 1200 2800 100 60 160 20 80 100 Table 2 Items Direct labour-hours Machine-hours Direct materials (€) Direct labour costs (€) Department 1 Department 2 Total 55 15 70 15 30 45 320 740 1060 450 120 570 Company A uses departmental (multiple) predetermined overhead rates with direct labor - hours as the allocation base in Department 1 and machine - hours as the allocation base in Department 2. Compute the predetermined overhead rate of the Department 2.
Transcribed Image Text:Company A has two manufacturing departments - Department 1 and Department 2. It considers all of its manufacturing overhead costs to be fixed costs. Estimations for the begining of the year is presented in the Table 1. During the year Job 1 was started and completed. Information on Job 1 is provided in the Table 2. Table 1 Items Manufacturing overhead costs (€) Direct labour-hours Machine-hours Department 1 Department 2 Total 1600 1200 2800 100 60 160 20 80 100 Table 2 Items Direct labour-hours Machine-hours Direct materials (€) Direct labour costs (€) Department 1 Department 2 Total 55 15 70 15 30 45 320 740 1060 450 120 570 Company A uses departmental (multiple) predetermined overhead rates with direct labor - hours as the allocation base in Department 1 and machine - hours as the allocation base in Department 2. Compute the predetermined overhead rate of the Department 2.
Company A uses a job-order costing system. Estimations for the begining of the year is presented in the Table 1. During the year Job 1 was started and completed. Information on Job 1 is provided in the Table 2. Table 1 Items Direct labour-hours required to support estimated production Machine-hours required to support estimated production Fixed manufacturing overhead cost (€) Variable manufacturing overhead costs per direct labour-hour (€ per DLH) Variable manufacturing overhead costs per machine-hour (€ per MH) Amount 28000 14000 156800 04 0,8 Table 2 Items Direct materials (€) Direct labour costs (€) Direct labour-hours Machine-hours Amount 35 45 3 1. The Company uses a plantwide predetermined overhead rate with direct labor - hours as the allocation base
Transcribed Image Text:Company A uses a job-order costing system. Estimations for the begining of the year is presented in the Table 1. During the year Job 1 was started and completed. Information on Job 1 is provided in the Table 2. Table 1 Items Direct labour-hours required to support estimated production Machine-hours required to support estimated production Fixed manufacturing overhead cost (€) Variable manufacturing overhead costs per direct labour-hour (€ per DLH) Variable manufacturing overhead costs per machine-hour (€ per MH) Amount 28000 14000 156800 04 0,8 Table 2 Items Direct materials (€) Direct labour costs (€) Direct labour-hours Machine-hours Amount 35 45 3 1. The Company uses a plantwide predetermined overhead rate with direct labor - hours as the allocation base
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