Question

1) Duke Snyder Company has two departments, X and Y. Overhead is applied based on direct labor cost in Department X and machine-hours in Department Y. The following additional information is available: Budgeted Amounts Direct labor cost Factory overhead Machine-hours Department X $180,000 $225,000 51,000 mh Department Y $165,000 $180,000 40,000 mh Actual data for Job #10 Direct materials requisitioned Direct labor cost Machine-hours Department X $10,000 $11,000 5,000 mh Department Y $16.000 $14,000 3.000 mh Required: a. Compute the budgeted factory overhead rate for Department X. b. Compute the budgeted factory overhead rate for Department Y. c. What is the total overhead cost of Job 10? d. If Job 10 consists of 50 units of product, what is the unit cost of this job?

Answer 1

Answer (1) Budgeted Factory overhead rate for Department X Budgeted Factory Overhead Budgeted Direct Labor Cost $225,000 $180,000 (b) 125% Budgeted Factory overhead rate for Department Y Budgeted Factory Overhead Budgeted Machine hours $180,000 40,000 $4.50 Per machine hour (c) Calculation of Total Overhead Cost of Job 10 Department X Overhead Costs applied to Job 10 Actual Direct Labor Cost * Predetermined Overhead rate $11,000 * 125% $13,750 Department Y Overhead Costs applied to Job 10 Machine hours used * Predetermined Overhead rate 3,000 * $4.50 $13,500 Total Overheads allocated $13,750 + $13,500 $27,250 (d) Calculation of Unit Cost of Job 10 Direct material $10,000+ $16,000 Direct Labor Cost $11,000+ $14,000 Manufacturing Overhead Total Cost Total Units 50 Units Manufacturing Cost per unit $78,250 50 Units $1,565 $26,000 $25,000 $27,250 $78,250