Question

Muldorf, Inc. has two manufacturing departments, Forming and Assembly. The company applies manufacturing overhead to jobs using a predetermined rate based on machine hours in the Forming Department and on direct labor hours in the Assembly Department. Information used to compute predetermined rates is given below: Estimated total manufacturing overhead cost Estimated machine hours Estimated direct labor hours Forming Assembly $325,000 $200,000 100,000 60,000 25,000 80,000 Job 99 required 400 machine hours in the Forming Department and 200 direct labor hours in the Assembly Department. The amount of manufacturing overhead applied to Job 99 in the Assembly Department is: a. $5,200 b. $ 500 O c. $ 800 O d. $1,300

Answer 1

Question no (1) Forming Assembly Estimated Total Manufacturing overhead Cost $ 325,000 $ 200,000 Number of Machine hours 100000 Number of Direct labour hours 80000 Predetermined OH Rate $ 3.25 $ 2.50 Overhead Applied to Job 99 : Assembly : 200 Hrs*2.50 $ 500.00 Option (B) is Correct - $500 Question no (2) Cost of goods manufactured Add ; Beginning Finished goods Less : Ending finished goods Unadjusted cost of goods sold $ $ $ $ 540,000 200,000 (180,000) 560,000 Option (B) is Correct - $560,000 Question no (3) Option [C] is correct - $40,000 Indirect materials will be debited to manufacturing overhead Note : Do comment for any further assistance