Activity 2 Mr. J. G. Pigg, III is the sole owner of a brick company that manufactures custom bricks used in upscale homes. No two customers have the same type of bricks. The bricks go through three processes: mixing, shaping, and firing. The company uses a job order cost system and computes a predetermined overhead rate in each department. The mixing department bases its rate on direct materials, the shaping department bases its rate on machine hours, and the firing department bases its rate on direct labor hours. At the beginning of the year, the company made the following estimates: Mixing 80,000 30,000 $300,000 $150,000 Department Shaping 45,000 70,000 $. 40 000 $140,000 Firing 60,000 21,000 $15,000 $75,000 Direct labor hours Machine hours Direct materials Manufacturing overhead a. Compute the predetermined overhead rate to be used in each department during the upcoming year. b. Assume the overhead rates that you computed in a. above are in effect. Compute the total overhead cost to be assigned to Dr. Snout's order-Job #5417, assuming the following data: Mixing 300 80 Department Shaping 80 120 Firing 92 120 $300 Direct labor hours Machine hours Direct materials $6,000 $120 c. If actual overhead incurred totaled $3,500, compute the amount of over- or underapplied manufacturing overhead.
Activity 2 Mr. J. G. Pigg, III is the sole owner of a brick company that manufactures custom bricks used in upscale homes. No two customers have the same type of bricks. The bricks go through three processes: mixing, shaping, and firing. The company uses a job order cost system and computes a predetermined overhead rate in each department. The mixing department bases its rate on direct materials, the shaping department bases its rate on machine hours, and the firing department bases its rate on direct labor hours. At the beginning of the year, the company made the following estimates: Mixing 80,000 30,000 $300,000 $150,000 Department Shaping 45,000 70,000 $. 40 000 $140,000 Firing 60,000 21,000 $15,000 $75,000 Direct labor hours Machine hours Direct materials Manufacturing overhead a. Compute the predetermined overhead rate to be used in each department during the upcoming year. b. Assume the overhead rates that you computed in a. above are in effect. Compute the total overhead cost to be assigned to Dr. Snout's order-Job #5417, assuming the following data: Mixing 300 80 Department Shaping 80 120 Firing 92 120 $300 Direct labor hours Machine hours Direct materials $6,000 $120 c. If actual overhead incurred totaled $3,500, compute the amount of over- or underapplied manufacturing overhead.
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter18: Activity-based Costing
Section: Chapter Questions
Problem 2PA: The management of Gwinnett County Chrome Company, described in Problem 1A, now plans to use the...
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