Question

	Fabrication	Painting	Assembly	Total
Total Mfg OH Costs	$590,000	$425,000	$200,000	$1,215,000
Direct Labor Hrs	4,000	5,700	3,600	13,300
Direct Labor Costs	$80,000	$72,500	$96,800	$249,300
Machine Hrs	9,500	5,900	6,100	21,500
Job K883	Fabrication	Painting	Assembly	Total
Direct Materials	$428	$209	$113	$750
Direct Labor Cost	$600	$250	$336	$1,186
Direct Labor Hours	29	22	27	78
Machine Hours	30	24	11	65

Blo-Blu Inc considers all its manufacturing overhead costs to be first costs. The above estimates were made at the beginning of the year for the expected total output. The second set of data relates to one particular job during the year. Please do any two of the following but one of them must be #4 or #5.

1. Determine the cost of Job K883 if Blo-Blu uses a predetermined plantwide overhead rate with direct labor hours as the allocation base.

2. Determine the cost of Job K883 if Blo-Blu uses a predetermined plantwide overhead rate with direct labor costs as the allocation base.

3. Determine the cost of Job K883 if Blo-Blu uses a predetermined plantwide overhead rate with machine hours as the allocation base.

4. Determine the cost of Job K883 if Blo-Blu uses a predetermined departmental overhead rate with machine hours as the allocation base for the Fabrication department, direct labor cost as the allocation base for the Painting department and direct labor hours as the allocation base for the Assembly department.

Determine the cost of Job K883 if Blo-Blu uses a predetermined departmental overhead rate with machine hours as the allocation base for the Fabrication department, direct labor hours as the allocation base for the   

Answer 1

Predetermined departmental overhead rate:

Fabrication = $590,000 / 9,500 = $62.1053

Painting = $425,000 / $72,500 = 5.86207

Assembly = $200,000 / 3,600 = $55.555

	Job K883
Direct materials	$750
Direct labor	1,186
Manufacturing overhead:
Fabrication (30*$62.1053)	1,863
Painting ($250*5.86207)	1,466
Assembly (27*$55.555)	1,500
Total costs	$6,765