Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $588,000 payroll for 7,000 direct labor-hours. Listed below is cost driver information used in the product-costing system: Budgeted Overhead Cost Driver Overhead Cost Pool Machine setups Materials handling Estimated Cost Driver Level 250 setups $ 1,098,950 Number of setups Number of barrels 9,350 barrels Quality control Number of inspections. 112,200 888,000 703,000 $ 2,802,150 2,400 inspections 18,500 machine hours Other overhead cost. Number of machine hours Total overhead A current product order has the following requirements: 22 setups Machine setups Materials handling 684 barrels Quality inspections Machine hours 87 inspections 1,400 machine hours Direct labor hour 492 hours What is the total manufacturing overhead for the current product order if the firm uses a plantwide rate based on direct labor-hours? (Round your intermediate calculation to 2 decimal places.)
Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $588,000 payroll for 7,000 direct labor-hours. Listed below is cost driver information used in the product-costing system: Budgeted Overhead Cost Driver Overhead Cost Pool Machine setups Materials handling Estimated Cost Driver Level 250 setups $ 1,098,950 Number of setups Number of barrels 9,350 barrels Quality control Number of inspections. 112,200 888,000 703,000 $ 2,802,150 2,400 inspections 18,500 machine hours Other overhead cost. Number of machine hours Total overhead A current product order has the following requirements: 22 setups Machine setups Materials handling 684 barrels Quality inspections Machine hours 87 inspections 1,400 machine hours Direct labor hour 492 hours What is the total manufacturing overhead for the current product order if the firm uses a plantwide rate based on direct labor-hours? (Round your intermediate calculation to 2 decimal places.)
Managerial Accounting: The Cornerstone of Business Decision-Making
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ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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Chapter9: Profit Planning And Flexible Budgets
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Problem 64E: Use the following information for Exercises 9-63 and 9-64: Palladium Inc. produces a variety of...
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Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $588,000 payroll for 7,000 direct labor-hours. Listed below is cost driver information used in the product-costing system.
![### Total Manufacturing Overhead Using Direct Labor-Hours: Power Company
Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes a $588,000 payroll for 7,000 direct labor-hours. Listed below is cost driver information used in the product-costing system:
| Overhead Cost Pool | Budgeted Overhead | Cost Driver | Estimated Cost Driver Level |
|--------------------|-------------------|-------------|-----------------------------|
| Machine setups | $1,098,950 | Number of setups | 250 setups |
| Materials handling | $112,200 | Number of barrels | 9,350 barrels |
| Quality control | $888,000 | Number of inspections | 2,400 inspections |
| Other overhead cost| $703,000 | Number of machine hours | 18,500 machine hours |
| **Total overhead** | **$2,802,150** | - | - |
A current product order has the following requirements:
- **Machine setups:** 22 setups
- **Materials handling:** 684 barrels
- **Quality inspections:** 87 inspections
- **Machine hours:** 1,400 machine hours
- **Direct labor hour:** 492 hours
### Question:
What is the total manufacturing overhead for the current product order if the firm uses a plantwide rate based on direct labor-hours? (Round your intermediate calculation to 2 decimal places.)
### Solution:
#### Step 1: Determine the Plantwide Overhead Rate
First, calculate the plantwide overhead rate based on direct labor-hours.
\[ \text{Plantwide Overhead Rate} = \frac{\text{Total Budgeted Overhead}}{\text{Total Direct Labor-Hours}} \]
\[ \text{Plantwide Overhead Rate} = \frac{ $2,802,150 }{ 7,000 \text{ hours} } \]
\[ \text{Plantwide Overhead Rate} = 400.3071428571 \]
\[ \text{Plantwide Overhead Rate} = 400.31 \, \text{(Rounded to 2 decimal places)} \]
#### Step 2: Calculate the Overhead for the Current Product Order
Next, multiply the plantwide overhead rate by the direct labor-hours for the current product order.
\[ \text{Total Manufacturing Overhead} = \text{](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F08138c1b-b13f-4cc9-90fc-4bc24dd3dae9%2F5458ebd3-2d90-41b4-b35c-7f09d74aa9eb%2Fvrs3h3t_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Total Manufacturing Overhead Using Direct Labor-Hours: Power Company
Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes a $588,000 payroll for 7,000 direct labor-hours. Listed below is cost driver information used in the product-costing system:
| Overhead Cost Pool | Budgeted Overhead | Cost Driver | Estimated Cost Driver Level |
|--------------------|-------------------|-------------|-----------------------------|
| Machine setups | $1,098,950 | Number of setups | 250 setups |
| Materials handling | $112,200 | Number of barrels | 9,350 barrels |
| Quality control | $888,000 | Number of inspections | 2,400 inspections |
| Other overhead cost| $703,000 | Number of machine hours | 18,500 machine hours |
| **Total overhead** | **$2,802,150** | - | - |
A current product order has the following requirements:
- **Machine setups:** 22 setups
- **Materials handling:** 684 barrels
- **Quality inspections:** 87 inspections
- **Machine hours:** 1,400 machine hours
- **Direct labor hour:** 492 hours
### Question:
What is the total manufacturing overhead for the current product order if the firm uses a plantwide rate based on direct labor-hours? (Round your intermediate calculation to 2 decimal places.)
### Solution:
#### Step 1: Determine the Plantwide Overhead Rate
First, calculate the plantwide overhead rate based on direct labor-hours.
\[ \text{Plantwide Overhead Rate} = \frac{\text{Total Budgeted Overhead}}{\text{Total Direct Labor-Hours}} \]
\[ \text{Plantwide Overhead Rate} = \frac{ $2,802,150 }{ 7,000 \text{ hours} } \]
\[ \text{Plantwide Overhead Rate} = 400.3071428571 \]
\[ \text{Plantwide Overhead Rate} = 400.31 \, \text{(Rounded to 2 decimal places)} \]
#### Step 2: Calculate the Overhead for the Current Product Order
Next, multiply the plantwide overhead rate by the direct labor-hours for the current product order.
\[ \text{Total Manufacturing Overhead} = \text{
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