Mason Company has two manufacturing departments-Machining and Assembly. The company considers all of its manufacturing overhead costs to be fixed costs. It provided the following estimates at the beginning of the year as well as the following information with respect to Jobs A and B: Estimated Data Total Machining $ 726,000 Assembly $ 121,000 Manufacturing overhead Direct labor-hours $ 847,000 77,000 72,000 11,000 66,000 6,000 Machine-hours 66,000 Job A Machining Assembly Total Direct labor-hours 5 10 15 Machine-hours 11 2 13 Job B Machining Assembly Total Direct labor-hours 4. 9. Machine-hours 12 3 15 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 that 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? (Round your intermediate calculations and final answers to 2 decimal places.) 1. Manufacturing overhead applied Job A Manufacturing overhead applied Job B 2. Manufacturing overhead applied Job A Manufacturing overhead applied Job B
Mason Company has two manufacturing departments-Machining and Assembly. The company considers all of its manufacturing overhead costs to be fixed costs. It provided the following estimates at the beginning of the year as well as the following information with respect to Jobs A and B: Estimated Data Total Machining $ 726,000 Assembly $ 121,000 Manufacturing overhead Direct labor-hours $ 847,000 77,000 72,000 11,000 66,000 6,000 Machine-hours 66,000 Job A Machining Assembly Total Direct labor-hours 5 10 15 Machine-hours 11 2 13 Job B Machining Assembly Total Direct labor-hours 4. 9. Machine-hours 12 3 15 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 that 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? (Round your intermediate calculations and final answers to 2 decimal places.) 1. Manufacturing overhead applied Job A Manufacturing overhead applied Job B 2. Manufacturing overhead applied Job A Manufacturing overhead applied Job B
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Mason Company has two manufacturing departments-Machining and Assembly. The company considers all of its manufacturing
overhead costs to be fixed costs. It provided the following estimates at the beginning of the year as well as the following information
with respect to Jobs A and B:
Estimated Data
Machining
$ 726,000
11,000
66,000
Assembly
$ 121,000
66,000
Total
$ 847,000
77,000
72,000
Manufacturing overhead
Direct labor-hours
Machine-hours
6,000
Job A
Machining Assembly
Total
Direct labor-hours
10
15
Machine-hours
11
13
Job B
Machining
Assembly
Total
Direct labor-hours
4
9.
Machine-hours
12
3
15
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 that 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? (Round your intermediate calculations and final answers to 2 decimal places.)
1. Manufacturing overhead applied Job A
Manufacturing overhead applied Job B
2. Manufacturing overhead applied Job A
Manufacturing overhead applied Job B
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