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 $ 3,960,000 110,000 44,000 Fabrication $4,400,000 66,000 220,000 Total 8,360,000 176,000 264,000 Assembly Fabrication Job Bravo Direct labor-hours Machine-hours 23 Total 38 33 15 18 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 Emachine-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

Answer 1

Answers

• Requirement 1

A	Total Manufacturing Overhead	$8,360,000
B	Total Direct Labor hours	176000
C = A/B	Plantwide Overhead rate	$47.50
D	No. of direct labor hours for Job Bravo	38
E = C x D	Plantwide manufacturing overhead applied to Job Bravo	$1,805 ANSWER

• Requirement 2

--Workings

		Assembly	Fabrication
A	Overhead	$3,960,000	$4,400,000
	Allocation base	DLHs	MHs
B	Amount of allocation base	110000	220000
C = A/B	Overhead rates	$36	$20
D	No. of hours for Job Bravo:
	DLHs in Assembly	23
	MHs in Fabrication		19
E = C x D	Overhead applied	$828	$380

>Manufacturing overhead applied from Assembly = $ 828
>Manufacturing overhead applied from Fabrication = $ 380

>Total overhed applied to Job Bravo = $ 828 + 380 = $ 1208