The Gilster Company, a machine tooling firm, has several plants. One plant, located in St. Cloud, Minnesota, uses a job order costing system for its batch production processes. The St. Cloud plant has two departments through which most jobs pass. Plant-wide overhead, which includes the plant manager’s salary, accounting personnel, cafeteria, and human resources, is budgeted at $400,000. During the past year, actual plantwide overhead was $385,000. Each department’s overhead consists primarily of depreciation and other machine-related expenses. Selected budgeted and actual data from the St. Cloud plant for the past year are as follows.     Department A   Department B Budgeted department overhead               (excludes plantwide overhead) $ 153,000     $ 439,900   Actual department overhead   170,000       459,900   Expected total activity:               Direct labor hours   50,000       25,000   Machine-hours   15,000       53,000   Actual activity:               Direct labor hours   50,500       23,900   Machine-hours   15,800       55,000       For the coming year, the accountants at the St. Cloud plant are in the process of helping the sales force create bids for several jobs. Projected data pertaining only to job no. 110 are as follows.     Direct materials $ 21,600   Direct labor cost:       Department A (3,000 hr)   45,000   Department B (1,100 hr)   10,000   Machine-hours projected:       Department A   230   Department B   1,200   Units produced   15,000       Required: a-1. Assume the St. Cloud plant uses a single plantwide overhead rate to assign all overhead (plantwide and department) costs to jobs. Use expected total direct labor hours to compute the overhead rate. a-2. What is the expected cost per unit produced for job no. 110?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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The Gilster Company, a machine tooling firm, has several plants. One plant, located in St. Cloud, Minnesota, uses a job order costing system for its batch production processes. The St. Cloud plant has two departments through which most jobs pass. Plant-wide overhead, which includes the plant manager’s salary, accounting personnel, cafeteria, and human resources, is budgeted at $400,000. During the past year, actual plantwide overhead was $385,000. Each department’s overhead consists primarily of depreciation and other machine-related expenses. Selected budgeted and actual data from the St. Cloud plant for the past year are as follows.

 

  Department A   Department B
Budgeted department overhead              
(excludes plantwide overhead) $ 153,000     $ 439,900  
Actual department overhead   170,000       459,900  
Expected total activity:              
Direct labor hours   50,000       25,000  
Machine-hours   15,000       53,000  
Actual activity:              
Direct labor hours   50,500       23,900  
Machine-hours   15,800       55,000  
 

 

For the coming year, the accountants at the St. Cloud plant are in the process of helping the sales force create bids for several jobs. Projected data pertaining only to job no. 110 are as follows.

 

 
Direct materials $ 21,600  
Direct labor cost:      
Department A (3,000 hr)   45,000  
Department B (1,100 hr)   10,000  
Machine-hours projected:      
Department A   230  
Department B   1,200  
Units produced   15,000  
 

 

Required:

a-1. Assume the St. Cloud plant uses a single plantwide overhead rate to assign all overhead (plantwide and department) costs to jobs. Use expected total direct labor hours to compute the overhead rate.

a-2. What is the expected cost per unit produced for job no. 110?

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