How do I calculate the cost of job 845 using a machine our departmental overhead rate for the milling department and then direct labor our overhead rate for the finishing department?
How do I calculate the cost of job 845 using a machine our departmental overhead rate for the milling department and then direct labor our overhead rate for the finishing department?
How do I calculate the cost of job 845 using a machine our departmental overhead rate for the milling department and then direct labor our overhead rate for the finishing department?
How do I calculate the cost of job 845 using a machine our departmental overhead rate for the milling department and then direct labor our overhead rate for the finishing department?
Transcribed Image Text:Machine operations
210
Total cost
0 x
C. Calculate the cost of Job 845 using a company-wide overhead rate based on machine hours.
First, compute company-wide overhead rate using machine hours (Note: Information needed for this computation can be found in the table below in part d.)
Round rate to two decimal places.
$ 0
x per machine hour
Next, use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed.
Job 845
Direct materials cost
Direct labor cost
Manufacturing overhead cost:
Total cost
d. Calculate the cost of Job &845 using a machine hour departmental overhead rate for the Milling Department and a direct labor hour overhead rate for the Finishing Department.
Milling Department manufacturing overhead
$352,000
Finishing Department manufacturing overhead
$128,000
Machine hours used
Milling Department
10,000 hours
Finishing Department
2,000 hours
Labor hours used
Milling Department
1,000 hours
Finishing Department
1,000 hours
Round rates to two decimal places, if needed.
$ 0
* per Milling Dept. machine hour
$ 0
X per Finishing Dept. direct labor hour
Use rounded overhead rates calculated above for calculations below. Round cost answers to the nearest whole number, when needed.
Job 845
Direct materials cost
Direct labor cost
Manufacturing overhead costs:
Milling Department
Finishing Department
Total cost
Transcribed Image Text:alculating Activity-Based Costing Overhead Rates
Assume that manufacturing overhead for Glassman Company consisted of the following activities and costs:
Setup (1,000 setup hours)
$152,000
Production scheduling (400 batches)
68,000
Production engineering (60 change orders)
120,000
Supervision (2,000 direct labor hours)
56,000
Machine maintenance (12,000 machine hours)
84.000
Total activity costs
$480,000
The following additional data were provided for Job 845
Direct materials costs
$9,000
Direct labor cost (5 Milling direct labor hours;
35 Finishing direct labor hours)
$3.000
Setup hours
Production scheduling
5 hours
1 batch
Machine hours used (25 Milling machine hours;
5 Finishing machine hours)
Production engineering
30 hours
3 change orders
a. Calculate the cost per unit of activity driver for each activity cost category.
Setup
152
Production scheduling cost
170
Production engineering cost S
2,000
Supervision cost
小8乙
Machine operating cost
b. Calculate the cost of Job 845 using ABC to assign the overhead costs.
Job 845
Direct materials cost
9,000
Direct labor cost
3,000
Manufacturing overhead costs:
Setup costs
Production scheduling
760
170
Production engineering
Supervision
6,000
Machine operations
210
Total cost
C. Calculate the cost of Job 845 using a company-wide overhead rate based on machine hours.
Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.
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