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		Total
Manufacturing overhead costs	$	1,650,000	$	1,950,000	$	3,600,000
Direct labor-hours		75,000		45,000		120,000
Machine-hours		30,000		150,000		180,000

Job Bravo	Assembly	Fabrication	Total
Direct labor-hours	16	8	24
Machine-hours	8	11	19

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 $0

Answer 1

Solution: 1) plantwide predetermined overhead rate=Estimated MOH/Estimated DLH 3600000/120000 30 per DLH 2) Departmental overhead rate Assembly=1650000/75000 Fabrication=1950000/150000 22 Per DLH 13 Per MH 352 Manufacturing overhead applied from Assembly to Job Bravo=22*16 Manufacturing overhead applied from Fabrication to Job Bravo=13*11 Total departmental manufacturing overhead applied to Job Bravo 143 495