Question

1. In picture**

2.total manufscting cost

2 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: 10 points 6,400 Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Department Cutting Finishing 68,000 63,100 1,500 $380,000 $416,000 2.00 $ 2.75 eBook Print 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: . Department References Direct labor-hours Machine-hours Direct materials Dir cost Cutting Finishing 3 14 82 5 $ 790 $ 380 $ 294 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203 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 3 Compute the predetermined overhead rate for each department. (Round your answers to 2 decimal places.) Department Cutting Finishing Predetermined overhead rate per MH per DLH Mc Graw Hill < Prey 2 of 6 Next >

Answer 1

1.
Predetermined Overhead rate
Cutting = $2 + $380000 / 63100 = $8.02 per machine hour
Finishing = $2.75 + 416000 / 68000 = $8.87 per labor hour

2.
Overhead assigned = 82 x $8.02 + 14 x $8.87 = $781.82
Total Manufacturing Cost = $790+380+63+294+781.82 = $2308.82

3.
Yes there will be significant difference. Since some jobs use higher labor hours some use higher machine hours.

If you have any query, kindly comment with your query and please mark thumbs up.