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 Assembly Fabrication abrication Total Manufacturing overhead costs $6,720,000 $7,280,000 $14,000,000 Direct labor-hours 140,000 84.000 224,000 Machine-hours 56,080 280,000 336,000 Job Bravo Direct labor-hours Machine-hours Assembly Fabrication Total 29 21 45 Se 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. 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 calculations to 2 decimal places) 11 Plantiride manufacturing overhead apprted to

Answer 1

Assembly department predetermined overhead rate = Estimated manufacturing overhead cost for assembly department / Estimated direct labor hours in assembly department = 6720000 / 140000	48
Fabrication department predetermined overhead rate = Estimated manufacturing overhead cost for fabrication department / Estimated machine hours in fabrication department = 7280000 / 280000	26

Manufacturing overhead applied from Assembly to Job Bravo = Assembly department predetermined overhead rate * Direct labor hours used by Job Bravo in Assembly department = 48 * 29	1392
Manufacturing overhead applied from Fabrication to Job Bravo = Fabrication department predetermined overhead rate * Machine hours used by Job Bravo in Fabrication department = 26 * 24	624
Total departmental manufacturing overhead applied to Job Bravo	2016