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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 Direct materials Direct labor cost Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 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: Required 1 Department Required 2 Cutting 4 87 $ 730 $ 84 Required 3 Predetermined overhead rate Finishing 15 6 $ 370 $ 315 Complete this question by entering your answers in the tabs given below. Cutting Using the predetermined overhead rates you computed In requirement (1), compute the total manufacturing cost assigned to Job 203. Compute the predetermined overhead rate for each department. Note: Round your answers to 2 decimal places. Department 6,900 52,100 $360,000 $ 4.00 0 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? Cutting Department per MH Finishing 75,000 1,400 $ 530,000 Finishing Department per DLH 0 $3.75

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 Direct materials Direct labor cost Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 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: Required 1 Department Required 2 Cutting 4 87 $ 730 $ 84 Required 3 Predetermined overhead rate Finishing 15 6 $ 370 $ 315 Complete this question by entering your answers in the tabs given below. Cutting Using the predetermined overhead rates you computed In requirement (1), compute the total manufacturing cost assigned to Job 203. Compute the predetermined overhead rate for each department. Note: Round your answers to 2 decimal places. Department 6,900 52,100 $360,000 $ 4.00 0 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? Cutting Department per MH Finishing 75,000 1,400 $ 530,000 Finishing Department per DLH 0 $3.75

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 30P: Primera Company produces two products and uses a predetermined overhead rate to apply overhead....
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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 Direct materials Direct labor cost Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 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 4 87 $ 730 $ 84 Finishing 15 6 Predetermined overhead rate Required 3 $ 370 $ 315 Required 1 Required 2 Compute the predetermined overhead rate for each department. Note: Round your answers to 2 decimal places. Cutting Department 6,900 52,100 Complete this question by entering your answers in the tabs given below. Cutting Department per MH $360,000 $ 4.00 0 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 75,000 1,400 $530,000 Finishing Department per DLH 0 $3.75
Transcribed Image Text: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 Direct materials Direct labor cost Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 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 4 87 $ 730 $ 84 Finishing 15 6 Predetermined overhead rate Required 3 $ 370 $ 315 Required 1 Required 2 Compute the predetermined overhead rate for each department. Note: Round your answers to 2 decimal places. Cutting Department 6,900 52,100 Complete this question by entering your answers in the tabs given below. Cutting Department per MH $360,000 $ 4.00 0 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 75,000 1,400 $530,000 Finishing Department per DLH 0 $3.75
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