Q= New Shalimar Steel’s management has made the following estimates at the start of the year. Department A B Machine-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000 8,000 Direct materials cost . . . . . . . . . . . . . . . . . . . . . . . . . . $510,000 $650,000 Direct labor-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 60,000 Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $130,000 $420,000 Variable manufacturing overhead per machine-hour $1.50 – Variable manufacturing overhead per direct labor-hour – $2.00 Fixed manufacturing overhead cost . . . . . . . . . . . . . $497,000 $615,000 The following record was drafted by the production department for Job A30 Direct labor-hours . . . . . . . . . . . . . . . . . . . . . . . . . 30 84 Machine-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 20 Materials placed into production . . . . . . . . . . . . . . $470 $332 Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . $325 $588 Required: a) Calculate the predetermined overhead rate used during the year in the Department A b) Calculate the rate used in the Department B c) Calculate the total overhead cost applied to Job A30. d) What would be Job A30 total cost recorded? If it contained 25 units, find out unit product cost? e) At the end of the year, the records of New Shalimar Steel revealed the following actual cost and operating data for all jobs worked on during the year Department A B Machine-hours . . . . . . . . . . . . . . . . . . . . . 65,000 9,000 Direct materials cost . . . . . . . . . . . . . . . . . $430,000 $680,000 Direct labor-hours . . . . . . . . . . . . . . . . . . . 10,000 62,000 Direct labor cost . . . . . . . . . . . . . . . . $108,000 $436,000 Manufacturing overhead cost . . . . . $570,000 $750,000 f) At the end of the year, how many overheads are under applied or over applied in each department?
Q= New Shalimar Steel’s management has made the following estimates at the start of the year.
Department
A B
Machine-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000 8,000
Direct materials cost . . . . . . . . . . . . . . . . . . . . . . . . . . $510,000 $650,000
Direct labor-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 60,000
Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $130,000 $420,000
Variable manufacturing overhead per machine-hour $1.50 –
Variable manufacturing overhead per direct labor-hour – $2.00
Fixed
The following record was drafted by the production department for Job A30
Direct labor-hours . . . . . . . . . . . . . . . . . . . . . . . . . 30 84
Machine-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 20
Materials placed into production . . . . . . . . . . . . . . $470 $332
Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . $325 $588
Required:
- a) Calculate the predetermined overhead rate used during the year in the Department A
- b) Calculate the rate used in the Department B
- c) Calculate the total overhead cost applied to Job A30.
- d) What would be Job A30 total cost recorded? If it contained 25 units, find out unit product cost?
- e) At the end of the year, the records of New Shalimar Steel revealed the following actual cost and operating data for all jobs worked on during the year
Department
A B
Machine-hours . . . . . . . . . . . . . . . . . . . . . 65,000 9,000
Direct materials cost . . . . . . . . . . . . . . . . . $430,000 $680,000
Direct labor-hours . . . . . . . . . . . . . . . . . . . 10,000 62,000
Direct labor cost . . . . . . . . . . . . . . . . $108,000 $436,000
Manufacturing overhead cost . . . . . $570,000 $750,000
- f) At the end of the year, how many
overheads are under applied or over applied in each department?
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