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 $ 600,000 50,000 20,000 Fabrication $ 800,000 30,000 100,000 Total 1,400,000 80,000 120,000 Assembly Fabrication Total Job Bravo Direct labor-hours Machine-hours 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 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) Plantwide overhead rate = 1400000/80000 = 17.50 per labor hour

Plantwide manufacturing overhead applied to Job Bravo = 14*17.50 = 245

2) Assembly overhead rate = 600000/50000 = 12 per DLH

Fabrication overhead rate = 800000/100000 = 8 per MH

Manufacturing overhead applied from Assembly to Job Bravo = 11*12 = 132

Manufacturing overhead applied from Fabrication to Job Bravo = 6*8 = 48

Total Departmental manufacturing overhead applied to Job Bravo = 132+48 = 180