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White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Direct labor-hours Machine-hours Direct materials Direct labor cost 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: Department Cutting 5 83 $ 730 $. 95 Finishing 12 6 Cutting 8,700 65,900 $ 400,000 $ 4.00 $360 $ 228 Finishing 64,000 2,900 $ 433,000 $ 3.75 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to J 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? Complete the question by entering your answers in the tabs given below.

White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Direct labor-hours Machine-hours Direct materials Direct labor cost 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: Department Cutting 5 83 $ 730 $. 95 Finishing 12 6 Cutting 8,700 65,900 $ 400,000 $ 4.00 $360 $ 228 Finishing 64,000 2,900 $ 433,000 $ 3.75 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to J 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? Complete the question by entering your answers in the tabs given below.

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter26: Manufacturing Accounting: The Job Order Cost System
Section: Chapter Questions
Problem 5SEB: PREDETERMINED FACTORY OVERHEAD RATE Marston Enterprises calculates a predetermined factory overhead...
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White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Direct abor-hours Machine-hours Direct materials Direct labor cost Department 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: Cutting 5 83 $ 730 $95. Finishing 12 6 Department $360 $ 228 Cutting 8,700 65,900 $ 400,000 $4.00 Required 3 Finishing 64,000 2,900 $ 433,000 $ 3.75 Using the predetermined overhead rates that 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? Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Compute the predetermined overhead rate for each department. (Round your answers to 2 decimal places.)
Transcribed Image Text:White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Direct abor-hours Machine-hours Direct materials Direct labor cost Department 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: Cutting 5 83 $ 730 $95. Finishing 12 6 Department $360 $ 228 Cutting 8,700 65,900 $ 400,000 $4.00 Required 3 Finishing 64,000 2,900 $ 433,000 $ 3.75 Using the predetermined overhead rates that 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? Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Compute the predetermined overhead rate for each department. (Round your answers to 2 decimal places.)
Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required 3 Compute the predetermined overhead rate for each department. (Round your answers to 2 decimal places.) Cutting Department Finishing Department per MH per DLH Predetermined overhead rate < Required 1 Required 2 > Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required 3 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. (Round your intermediate calculations and final answer to 2 decimal places.) Total manufacturing cost < Required 1 Required 3 >
Transcribed Image Text:Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required 3 Compute the predetermined overhead rate for each department. (Round your answers to 2 decimal places.) Cutting Department Finishing Department per MH per DLH Predetermined overhead rate < Required 1 Required 2 > Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required 3 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. (Round your intermediate calculations and final answer to 2 decimal places.) Total manufacturing cost < Required 1 Required 3 >
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