Question

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Mason Company has two manufacturing departments-Machining and Assembly. The company considers all of its manufacturing overhead costs to be fixed costs. It provided the following estimates at the beginning of the year as well as the following information with respect to Jobs A and B: Estimated Data Manufacturing overhead Direct labor hours Machine hours Machining $12,944,000 24,000 456,000 Assembly $ 576,000 456,000 19,000 Total $11,520,000 480,000 475,000 Machining Assembly Total Job Direct labor hours Machine hours 11 Job B Direct labor hours Machine hours Machining 2 Assembly Total 15 Required: 1. Mason Company uses a plantwide predetermined overhead rate with direct labor hours as the allocation base, how much manufacturing overhead cost would be applied to Job A? Job B2 (Round your answers to the nearest whole dollar amount.) 2. Assume that Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based on machine-hours and the Assembly Department is allocated based on direct labor-hours. How much manufacturing overhead cost would be applied to Job A? Job B? (Round your intermediate calculations and final answers to 2 decimal places.) 1. Manufacturing overhead applied JobA Manufacturing overhead applied Job B 2. Manufacturing overhead applied JobA M u ring overhead applied Job B

Answer 1

	total manufcturing overheads			11520000
	total labor hours			480000
		rate		24
1	manu ohs applied to job A			`=15*24		360
	manu ohs applied to job B			`=9*24		216
	`=10944000/475000		`=MACHINING OH/MACHINE HOURS
		`=576000/480000		`=ASSEMBLY OHS/LABOR HOURS
	23.04	1.2
2	manu ohs applied to job A			`=23.04*5	+	`=1.2*10	127.2
				`=23.04*11	+	`=1.2*2	255.84
							383.04
	manu ohs applied to job B			`=23.04*4	+	`=1.2*5	98.16
				`=23.04*12	+	`=1.2*3	280.08
						378.24