Question

Analytical Review: Michelleine A. Manufacturing Inc Michelleine A. LLC. had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments--Molding and Fabrication. It started, completed, and sold only two jobs during March-Job P and Job O, The following additional information is available for the company as a whole and for Jobs P and O (all data and questions relate to the month of March): Molding Total Fabrication Estimated total machine-hours used 3,000.00 2,500.00 5,500.00 Estimated total fixed manufacturing overhead 15,000.00 12,000.00 27,000.00 Estimated variable manufacturing overhead per machine- 2.25 1,50 hour Job D-70: Job Q Job P Direct materials cost 8,000.00 13,000.00 7,500.00 Direct labor cost 21,000.00 Actual Machine-hours Used 800.00 1,700.00 Molding 600.00 900.00 Fabrication 1,700.00 2,300.00 Total Michelleine had no underapplied or overapplied manufacturing overhead during the year. Page 2-11 Dr. Daniel Aoheampong. CPA Spring 2020

Answer 1

Solution:

2-1. Plantwide predetermined overhead rate = Estimated total fixed mfg. Overhead / Estimated total machine hours

   = $27,000 / 5,500

   = $4.91 Per MH (rounded off)

2-2. Manufacturing OH applied to Job P = $15,193 which is computed as follows:

Departments Molding Fabrication Total Variable mfg. OH 2,550 $ ($1.50x1700) ($2.25×600) 1,350 Fixed mfg. OH allocated 8,347 2,946 ($4.91x1,700) ($4.91x600) Total manufacturing OH $ 4,296 $15,193 10,897 $

Manufacturing OH applied to Job Q = $11,572 which can be computed as follows:

Departments Molding Fabrication Total Variable mfg. OH 1,200 $ | ($1.50x800) 2$ 2,025 ($2.25x900) Fixed mfg. OH allocated 3,928 4,419 ($4.91x800) ($4.91x900) Total manufacturing OH $ 6,444 $11,572 5,128 $

2-3 Total manufacturing cost assigned to Job P = $49,193 which were computed as follows:

Job P Direct materials cost Direct labor cost Manufacturing overhead Total manufacturing cost assigned 13,000 21,000 15,193 $ 49,193 %24