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White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predeter
Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Var
Department Cutting Finishing 8,500 76,000 3,880 $ 380,00 $ 599,000 $ 3.80 $ 3.75 Direct labor-hours Machine-hours Total fixed
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Answer #1
Required 1 :
Department
Cutting Finishing
Predetermined overhead rate 9.00 per MH 11.63 per DLH
Required 2 :
Job 203
Direct materials ( 730 + 380 ) 1110
Direct labor cost ( 90 + 342 ) 432
Manufacturing overhead allocated [ ( 84 * 9.00 ) + ( 19 * 11.63 ) ] 977
Total manufacturing cost 2519
Required 3 :
Answer : Yes
Reason : In departmental rates the overhead is applied based on the main activity of the department and in plantwide predetermined overhead rate the overheads are applied on the basis of only one factor, so the amount of overhead assigned to jobs can substantially differ.
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