Chapter 2, Problem 17P

PROBLEM 2−17 Plantwide and Departmental Predetermined Overhead Rates; Overhead Application LO2−1, LO2−2

Wilmington Company has two manufacturing departments—Assembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is shown below is based on estimates from the beginning of the year. The second set of data relates to one particular job completed during the year—Job Bravo.

Estimated Data	Assembly	Fabrication	Total
Manufacturing overhead costs	$600,000	$800,000	$1,400,000
Direct labor-hours	50,000	30,000	80,000
Machine-hours	20,000	100,000	120,000

Job Bravo	Assembly	Fabrication	Total
Direct labor-hours	11	3	14
Machine-hours	3	6	9

Required:

1. If Wilmington used a plantwide predetermined overhead rate based on direct labor-hours, how much manufacturing overhead would be applied to Job Bravo?
2. If Wilmington uses departmental predetermined overhead rates with direct labor-hours as the allocation base in Assembly and machine-hours as the allocation base in Fabrication, how much manufacturing overhead would be applied to Job Bravo?