2 White Company has two departments, Cutting and Finishing. The company uses job-order costing and computes a predeterminedoverhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases itsrate on direct labor-hours. At the beginning of the year, the company made the following estimates:Direct labor-hoursMachine-hoursTotal fixed manufacturing overhead costVariable manufacturing overhead per machine-hourVariable manufacturing overhead per direct labor-hourDirect labor-hoursMachine-hoursDirect materialsDirect labor costDepartmentCuttingReq1. Compute the predetermined overhead rate for each department.2. The job cost sheet for Job 203, which was started and completed during the year, showed the following:488$ 710$ 88Finishing124Department$ 390$ 264Cutting8,60056,300$ 390,000$ 4.000Finishing90,0003,800$ 580,0000$3.75Using the predetermined overhead rates you computed in requirement (1), compute the total manufacturing cost assigned to Job203.3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwidepredetermined overhead rate based on direct labor-hours, rather than using departmental rates?

Name: 2 White Company has two departments, Cutting and Finishing. The compan
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Description: 2 White Company has two departments, Cutting and Finishing. The company uses job-order costing and computes a predeterminedoverhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases it

1. Compute the predetermined overhead rate for each department:a. Cutting Department: PORCutting…

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Required: 1. Compute the predetermined overhead rate for each department. 2. The job cost sheet for Job 203, which was started and completed during the year, showed the following: Direct labor-hours Machine-hours Direct materials Direct labor cost. Department Cutting 4 88 $710 $88 Finishing 12 4 $ 390 $ 264 Using the predetermined overhead rates you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates?

Required: 1. Compute the predetermined overhead rate for each department. 2. The job cost sheet for Job 203, which was started and completed during the year, showed the following: Direct labor-hours Machine-hours Direct materials Direct labor cost. Department Cutting 4 88 $710 $88 Finishing 12 4 $ 390 $ 264 Using the predetermined overhead rates you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter3: Process Cost Systems

Section: Chapter Questions

Problem 4E: The cost accountant for River Rock Beverage Co. estimated that total factory overhead cost for the...

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