Question

Wilmington Company has two manufacturing departments--Assembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is shown below is based on estimates from the beginning of the year. The second set of data relates to one particular job completed during the year--Job Bravo. Estimated Data Manufacturing overhead costs Direct labor-hours Machine-hours Asserbly $ 1,920,000 80,000 32,000 Fabrication $ 2, 240,000 48,000 160,000 Total $ 4,160,000 128,000 192,000 Total 26 21 Assembly Fabrication 17 9 9 12 Job Bravo Direct labor-hours Machine-hours Required: 1. If Wilmington used a plantwide predetermined overhead rate based on direct labor-hours, how much manufacturing overhead would be applied to Job Bravo? 2. If Wilmington uses departmental predetermined overhead rates with direct labor-hours as the allocation base in Assembly and machine-hours as the allocation base in Fabrication, how much manufacturing overhead would be applied to Job Bravo? (Round your intermediate calculation to 2 decimal places.) $ 0 1. Plantwide manufacturing overhead applied to Job Bravo 2. Manufacturing overhead applied from Assembly to Job Bravo Manufacturing overhead applied from Fabrication to Job Bravo Total departmental manufacturing overhead applied to Job Bravo Next > 5 of 6 < Prey AZ

Answer 1

1. Plantwide predetermined Overhead rate based on direct labour hours

Total Overhead	4160000
Direct labour hours	128000
Direct Labour Hour Rate DLHR = Total overhead / Direct labour hours = 4160000 / 128000 = $32.5 per hour	$32.5 per hour
Manufacturing overhead charged to Job Bravo = Total labour hours x Overhead absorption rate = 26 hours x $32.5 = $845	$845
2. Departmental Overhead Absorption Rate (OAR)
	Assembly
Total Overhead	1920000
Direct labour hours	80000
DLHR = Total overhead / Direct labour hours = 1920000 / 80000 = $24 per hour	$24 per hour
	Fabrication
Total Overhead	2240000
Direct machine hours	160000
Machine Hour Rate MHR = Total overhead / Direct machine hours = 2240000 / 160000 = $14 per hour	$14 per hour
Manufacturing overhead charged to Job Bravo
Assembly = 17 hours x $ 24	408
Fabrication = 12 hours x $14	168
	$576