Question

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 Manufacturing overhead costs Direct labor-hours Machine-hours Assembly $3,570,000 105,000 42,000 Fabrication $3,990,000 63.000 Total $ 7,560,000 168.000 252,000 Job Bravo Direct labor-hours Machine-hours chours Assembly Fabrication Total 14 22 14 36 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? (Round your intermediate calculation to 2 decimal places.) 1. Plantwide manufacturing overhead applied to Job Bravo 2. Manufacturing overhead applied from Assembly to Job Bravo Manufacturing overhead applied from Fabrication to Job Bravo Total departmental manufacturing overhead applied to Job Bravo

Answer 1

1.

Estimated manufacturing overhead costs = $7,560,000

Estimated direct labor hours = 168,000

Predetermined overhead rate = Estimated manufacturing overhead costs / Estimated direct labor hours

= 7,560,000/168,000

= $45 per direct labor hour

Manufacturing overhead applied to Job Bravo = Direct labor hour used by Job Bravo x Predetermined overhead rate

= 36 x 45

= $1,620

2.

Assembly department manufacturing overhead cost = $3,570,000

Assembly department direct labor hours = 105,000

Assembly department Predetermined overhead rate = Assembly department manufacturing overhead cost / Assembly department direct labor hours

= 3,570,000/105,000

= $34 per direct labor hour

Fabrication department manufacturing overhead cost = $3,990,000

Fabrication department direct labor hours = 210,000

Fabrication department Predetermined overhead rate = Fabrication department manufacturing overhead cost / Fabrication department direct labor hours

= 3,990,000/210,000

= $19 per direct labor hour

Manufacturing overhead applied for assembly to Job Bravo = Direct labor hours used in Assembly x Assembly department Predetermined overhead rate

= 22 x 34

= $748

Manufacturing overhead applied for Fabrication to Job Bravo = Manufacturing overhead used in Fabrication department x Fabrication department Predetermined overhead rate

= 17 x 19

= $323

1.	Plantwide manufacturing overhead applied to Job Bravo	$1,620
2.	Manufacturing overhead applied from Assembly Job Bravo	$748
	Manufacturing overhead applied from Fabrication Job Bravo	$323
	Total departmental manufacturing overhead applied to Job Bravo	$1,071

Kindly comment if you need further assistance. Thanks‼!