White Company has two departments, Cutting and Finishing. The company uses job-order costing 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 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 80 $ 750 $95 Finishing Predetermined overhead rate 11 5 $ 370 $ 209 Cutting Required 1 Required 2 Required 3 Compute the predetermined overhead rate for each department. Note: Round your answers to 2 decimal places. Department 6,600 58,500 $ 400,000 $ 4.00 0 Complete this question by entering your answers in the tabs given below. Cutting Department per MH 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? Finishing 83,000 1,100 $ 471,000 0 $3.75 Finishing Department per DLH
White Company has two departments, Cutting and Finishing. The company uses job-order costing 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 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 80 $ 750 $95 Finishing Predetermined overhead rate 11 5 $ 370 $ 209 Cutting Required 1 Required 2 Required 3 Compute the predetermined overhead rate for each department. Note: Round your answers to 2 decimal places. Department 6,600 58,500 $ 400,000 $ 4.00 0 Complete this question by entering your answers in the tabs given below. Cutting Department per MH 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? Finishing 83,000 1,100 $ 471,000 0 $3.75 Finishing Department per DLH
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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