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

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Chapter1: Financial Statements And Business Decisions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

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 Assembly
5
10
11
2
Machining
4
12
Assembly
5
3
Assembly
$361,000
266,000
14,000
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?

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