Exercise 15

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Exercise 15-5 Duggan Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $315,000 for the year, and machine usage is estimated at 126,000 hours.

For the year, $330,174 of overhead costs are incurred and 130,100 hours are used.

Exercise 16-3 The ledger of Custer Company has the following work in process account.
Work in Process—Painting
5/1 Balance 4,250 5/31 Transferred out ?
5/31 Materials 6,690
5/31 Labor 4,310
5/31 Overhead 1,400
5/31 Balance ?

Production records show that there were 510 units in the beginning inventory, 30% complete, 1,580 units started, and 1,560 units transferred out. The beginning work in process
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Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations. Standard Custom
Direct labor costs $58,400 $116,000
Machine hours 1,310 1,160
Setup hours 100 440

Total estimated overhead costs are $305,300. Overhead cost allocated to the machining activity cost pool is $199,600, and $105,700 is allocated to the machine setup activity cost pool.

(a)

Your answer is correct. Compute the overhead rate using the traditional (plantwide) approach. (Round answers to 2 decimal places, e.g. 12.25%.)
Predetermined overhead rate % of direct labor
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