Problem #3. Kronos Company has two departments, Milling and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Milling Department bases its rate on machine-hours, and the Assembly Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Milling Assembly Direct labor hours 8,000 80,000 Machine hours 60,000 3,000 Total manufacturing overhead costs ₱510,000 ₱800,000 Required: 1.Compute the predetermined overhead rate to be used in each department. 2.Assume that the overhead rates you computed in (1) above are in effect. The job cost sheet for Job 400, which was started and completed during the year, showed the following: Milling Assembly Direct labor hours 5 20 Machine hours 90 4 Materials requisitioned ₱800 ₱370 Direct labor cost ₱45 ₱160 Compute the total manufacturing cost assigned to Job 400
Problem #3. Kronos Company has two departments, Milling and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Milling Department bases its rate on machine-hours, and the Assembly Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Milling Assembly Direct labor hours 8,000 80,000 Machine hours 60,000 3,000 Total manufacturing overhead costs ₱510,000 ₱800,000 Required: 1.Compute the predetermined overhead rate to be used in each department. 2.Assume that the overhead rates you computed in (1) above are in effect. The job cost sheet for Job 400, which was started and completed during the year, showed the following: Milling Assembly Direct labor hours 5 20 Machine hours 90 4 Materials requisitioned ₱800 ₱370 Direct labor cost ₱45 ₱160 Compute the total manufacturing cost assigned to Job 400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Problem #3. Kronos Company has two departments, Milling and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Milling Department bases its rate on machine-hours, and the Assembly Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates:
Milling Assembly
Direct labor hours 8,000 80,000
Machine hours 60,000 3,000
Total manufacturing overhead costs ₱510,000 ₱800,000
Required:
1.Compute the predetermined overhead rate to be used in each department.
2.Assume that the overhead rates you computed in (1) above are in effect. The job cost sheet for Job 400, which was started and completed during the year, showed the following:
Milling Assembly
Direct labor hours 5 20
Machine hours 90 4
Materials requisitioned ₱800 ₱370
Direct labor cost ₱45 ₱160
Compute the total manufacturing cost assigned to Job 400
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