Question

Use the information below to answer the following two questions: Jenn Brothers has two manufacturing departments-Production and Finishing. At the beginning of the most recent period, the company made the following estimates related to production and manufacturing overhead: Estimated machine-hours (MH) Estimated direct labor-hours (DLH) Estimated total manufacturing overhead (MOH) Production 17.000 5,085 S 159.800 Finishing 10,000 3.215 64.300 S At the end of the period, results for two jobs the company started and completed were as follows: Job A55 482 S 5495 Job B72 514 671 110 90 Actual direct material cost Actual direct labor cost Actual MHs - Production Department Actual MHs - Finishing Department Actual DLH - Production Department Actual DLH - Finishing Department 25 13 The company is deciding whether to use a plant-wide predetermined overhead rate (POHR) or departmental predetermined overhead rates. If the company uses a plant-wide POHR based on machine-hours, the total cost of Job A55 would be: A S 913.00 B. $ 1,329.80 C. $ 1.944,00 D. $ 4,001.00 E. None of the above 14 If the company uses departmental POHRs with MH as the allocation base for the Production Department and DLH as the allocation base for the Finishing Department, the total cost of Job B72 would be closest to: B A. S 1,944.49 S 2,499.00 C. S 2.819.00 D. $ 3.334.00 E. None of the above

Answer 1

	13	PLANT WIDE OVERHED RATE(POHR)
	A	Total Manufacturing Overhead	$224,100	(159800+64300)
	B	Total Machine Hour	27000	(17000+10000)
	C=A/B	Plant wide Overhead Rate(POHR)	$8.30
		Cost of Job A55:
		Total Machine hours used=90+20	110
		Applied Overhead =110*$8.30	$913.00
		Cost of Job A55:
	a	Direct Material Cost	$482.00
	b	Direct Labor Cost	$549.00
	c	Manufacturing Overhead	$913.00
	d=a+b+c	Total Cost of Job A55	$1,944.00
		ANSWER:
		C,$1,944.00
	14	PRODUCTION DEPARTMENT RATE
	a	Total Overhead in Production Dept	$159,800
	b	Total Machine hours in Production Dept	17000
	c=a/b	Production Dept Overhead Rate	$9.40
		FINISHING DEPARTMENT RATE
	d	Total Overhead in Finishing Dept	$64,300
	e	Total Direct labor hours(DLH) in Finishing Dept	3215
	f=d/e	Finishing Dept Overhead Rate	$20.00
		Cost of Job B72:
	g	Direct Material Cost	$514.00
	h	Direct Labor Cost	$671.00
	i	Applied Overhead in Production Dept	$1,034.00	(110*9.40)
	j	Applied Overhead in Finishing Dept	$280.00	(14*20.00)
	k=i+j	Total Manufacturing Overhead	$1,314.00
	l=g+h+k	Total Cost of Job B72	$2,499.00
		ANSWER:
		B. $2,499.00