Q3: Bassam Company uses machine hours as the allocation base in the machining department and direct labor hours as allocation base in the Assembly department. At the beginning of the year, the company made the following estimates: Estimated data Direct labor hours Machine hours Total fixed manufacturing overhead cost Machining deptt Assembly deptt 8000 25000 40000 5000 250000 3600000 Variable manufacturing overhead per machine hour Variable manufacturing overhead per direct labor hour $2.5 $4.25 Required: • Calculate predetermined overhead rate in Machining and Assembly departments. • How much overhead cost would be applied to Job M, assuming that it used five machine hours in the machining department and 10 direct labor hours in the assembly dept.
Q3: Bassam Company uses machine hours as the allocation base in the machining department and direct labor hours as allocation base in the Assembly department. At the beginning of the year, the company made the following estimates: Estimated data Direct labor hours Machine hours Total fixed manufacturing overhead cost Machining deptt Assembly deptt 8000 25000 40000 5000 250000 3600000 Variable manufacturing overhead per machine hour Variable manufacturing overhead per direct labor hour $2.5 $4.25 Required: • Calculate predetermined overhead rate in Machining and Assembly departments. • How much overhead cost would be applied to Job M, assuming that it used five machine hours in the machining department and 10 direct labor hours in the assembly dept.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Q3: Bassam Company uses machine hours as the allocation base
in the machining department and direct labor hours as allocation
base in the Assembly department. At the beginning of the year,
the company made the following estimates:
Estimated data
Direct labor hours
Machine hours
Total fixed manufacturing overhead cost
Machining deptt Assembly deptt
8000
25000
40000
5000
250000
3600000
Variable manufacturing overhead per machine hour
Variable manufacturing overhead per direct labor
hour
$2.5
$4.25
Required:
•
Calculate predetermined overhead rate in Machining
and Assembly departments.
• How much overhead cost would be applied to Job M,
assuming that it used five machine hours in the
machining department and 10 direct labor hours in the
assembly dept.
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