Mason Company has two manufacturing departments-Machining and Assembly. All of the company's manufacturing overhead costsare fixed costs. It provided the following estimates at the beginning of the year as well as the following information for Jobs A and B:Estimated DataManufacturing overheadDirect labor-hoursMachine-hoursJob ADirect labor-hoursMachine-hoursJob BDirect labor-hoursMachine-hoursMachining$5,054,00019,000266,000Machining Assembly510112Machining412Assembly53Assembly$361,000266,00014,000Total1513Total915Total$5,415,000285,000280,000Required:1. If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how muchmanufacturing overhead cost would be applied to Job A? Job B?2. Assume Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based onmachine-hours and the Assembly Department is allocated based on direct labor-hours. How much manufacturing overhead costwould be applied to Job A? Job B?

Name: Mason Company has two manufacturing departments-Machining and Assembl
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Description: Mason Company has two manufacturing departments-Machining and Assembly. All of the company's manufacturing overhead costsare fixed costs. It provided the following estimates at the beginning of the year as well as the following information for Jobs

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Mason Company has two manufacturing departments-Machining and Assembly. All of the company's manufacturing overhead costs are fixed costs. It provided the following estimates at the beginning of the year as well as the following information for Jobs A and B: Estimated Data Manufacturing overhead Direct labor-hours Machine-hours Job A Direct labor-hours Machine-hours Job B Direct labor-hours Machine-hours Machining $ 5,054,000 19,000 266,000 Machining 5 11 Assembly 10 2 Assembly $361,000 266,000 14,000 Machining Assembly 4 5 12 3 Total 15 13 Total 9 15 Total $5,415,000 285,000 280,000 Required: 1. If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how much manufacturing overhead cost would be applied to Job A? Job B? 2. Assume Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based on machine-hours and the Assembly Department is allocated based on direct labor-hours. How much manufacturing overhead cost would be applied to Job A? Job B?

Mason Company has two manufacturing departments-Machining and Assembly. All of the company's manufacturing overhead costs are fixed costs. It provided the following estimates at the beginning of the year as well as the following information for Jobs A and B: Estimated Data Manufacturing overhead Direct labor-hours Machine-hours Job A Direct labor-hours Machine-hours Job B Direct labor-hours Machine-hours Machining $ 5,054,000 19,000 266,000 Machining 5 11 Assembly 10 2 Assembly $361,000 266,000 14,000 Machining Assembly 4 5 12 3 Total 15 13 Total 9 15 Total $5,415,000 285,000 280,000 Required: 1. If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how much manufacturing overhead cost would be applied to Job A? Job B? 2. Assume Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based on machine-hours and the Assembly Department is allocated based on direct labor-hours. How much manufacturing overhead cost would be applied to Job A? Job B?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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