Question

Ch 2 HW 3 Exercise 2-13 Departmental Predetermined Overhead Rates (L02-1, LO2-2, LO2.4) White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor hours. At the beginning of the year, the company made the following estimates Department Cutting Finishing 9.000 36. 3.00 5 350, 49e, see 5 3 Total fixed manufacturing overhead cost Vanufacturing overhead per sachhour variante tantacturing overhead per direct later hour 10.10 Required: 1. Compute the predetermined overhead rate for each department 2 The job cost sheet for Job 203, which was started and completed during the year, showed the following Direct labor.hr Machin-hours Direct trials Direct labor cost Department Cutting Fishing 16 89 17 111 203 Using the predetermined overhead roles that you computed in requirement in compute the total manufacturing cost assigned to Job 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor hours, rather than using departmental rates? Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required Compute the predetermined overhead rate for each department (Round your answers to 2 decimal places.) Department Cutting Precotermined overhead rate per MH per DLH S Raja Required 2 >

Answer 1

Plesae Check with the number, as the image is slightly Blur, i have taken values to my best of my sight. Thank You.

1)
	Cutting Department
Predetermine overhead rate      =   Est. Fixed Manf. Overhead / Estimated Machine Hours      =    $ 360,000 / 57,000 MH	$ 6.32 per MH
	Finishing Department
Predetermine overhead rate      =   Est. Fixed Manf. Overhead / Estimated Direct Labor Hours      =    $ 490,000 / 86,000 DLH	$ 5.70 per DLH
2)
Direct material ( $ 740 + $ 370 )	$ 1,110
Direct labor cost ( $ 110 + $ 352 )	$ 462
Manufacturing Overhead Cost ( 89 MH x $ 6.32 ) + ( 16 DLh x $ 5.70 )	$ 653.68
Total Manufacturing cost	$ 2,225.68
3)
Yes