completed, and so only two Jobs uuring the year JOD Q. The company uses a partive predelemme overhead rate based on machine-hours. At the beginning of the year, it estimated that 4,000 machine-hours would be required for the period's estimated level of production. Sweeten also estimated $28,600 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.60 per machine-hour. Because Sweeten has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following additional information to enable calculating departmental overhead rates: Estimated total machine-hours used Estimated total fixed manufacturing overhead Molding Fabrication 2,500 1,500 $ 16,350 $ 3.10 Estimated variable manufacturing overhead per machine-hour $ 12,250 $ 2.30 The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows: Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total Job P $ 22,000 $ 28,200 2,600 1,500 4,100 LLD Job Q $ 12,500 $ 11,100 1,700 1,800 3,500 Total 4,000 $ 28,600 Sweeten Company had no overapplied or underapplied manufacturing overhead costs during the year. Required: For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base. For questions, 9-15, assume that the company uses predetermined departmental overhead rates with machine-hours as the allocation base in both departments. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q? (Do round intermediate calculations.)
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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completed, and so only two jous during the year JOD Q. The company uses a planie predelemme
overhead rate based on machine-hours. At the beginning of the year, it estimated that 4,000 machine-hours would be
required for the period's estimated level of production. Sweeten also estimated $28,600 of fixed manufacturing overhead
cost for the coming period and variable manufacturing overhead of $2.60 per machine-hour.
Because Sweeten has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide
overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following
additional information to enable calculating departmental overhead rates:
Direct materials
Direct labor cost
Actual machine-hours used:
Molding
Fabrication
Estimated total machine-hours used
Molding Fabrication
2,500
1,500
Estimated total fixed manufacturing overhead
Estimated variable manufacturing overhead per machine-hour
$ 12,250
$ 2.30
$ 16,350
$ 3.10
The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows:
Manufacturing overhead applied
Job P
$ 22,000
$ 28,200
Saved
Job P
2,600
1,500
4,100
< Prev
Job Q
Job Q
$ 12,500
$ 11,100
Total
Sweeten Company had no overapplied or underapplied manufacturing overhead costs during the year.
10
Comparing Themes, Videos
1,700
1,800
3,500
Required:
For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as
the allocation base. For questions, 9-15, assume that the company uses predetermined departmental overhead rates with
machine-hours as the allocation base in both departments.
10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q? (Do
not round intermediate calculations.)
11 12
... 15
Total
of 15
4,000
$ 28,600
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Solution 10:
Departmental overhead rate = Estimated overhead cost of department / Estimated machine hours
Overhead applied to Job = Actual machine hours * Overhead rate
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