Mason Company has two manufacturing departments—Machining and Assembly. The company considers all of its manufacturing overhead costs to be fixed costs. It provided the following estimates at the beginning of the year as well as the following information with respect to Jobs A and B: Estimated DataMachiningAssemblyTotalManufacturing overhead$7,056,000 $441,000 $7,497,000 Direct labor hours 21,000  336,000  357,000 Machine hours 336,000  16,000  352,000  Job AMachiningAssemblyTotalDirect labor hours51015Machine hours11213  Job BMachiningAssemblyTotalDirect labor hours459Machine hours12315  Required:1. If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how much manufacturing overhead cost would be applied to Job A? Job B? (Round your answers to the nearest whole dollar amount.)2. Assume that Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based on machine-hours and the Assembly Department is allocated based on direct labor-hours. How much manufacturing overhead cost would be applied to Job A? Job B? (Round your intermediate calculations and final answers to 2 decimal places.)

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Asked Feb 11, 2020
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Mason Company has two manufacturing departments—Machining and Assembly. The company considers all of its manufacturing overhead costs to be fixed costs. It provided the following estimates at the beginning of the year as well as the following information with respect to Jobs A and B:

 

Estimated Data Machining Assembly Total
Manufacturing overhead $ 7,056,000   $ 441,000   $ 7,497,000  
Direct labor hours   21,000     336,000     357,000  
Machine hours   336,000     16,000     352,000
 

 

Job A Machining Assembly Total
Direct labor hours 5 10 15
Machine hours 11 2 13
 

 

Job B Machining Assembly Total
Direct labor hours 4 5 9
Machine hours 12 3 15
 

 

Required:

1. If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how much manufacturing overhead cost would be applied to Job A? Job B? (Round your answers to the nearest whole dollar amount.)

2. Assume that Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based on machine-hours and the Assembly Department is allocated based on direct labor-hours. How much manufacturing overhead cost would be applied to Job A? Job B? (Round your intermediate calculations and final answers to 2 decimal places.)

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  1. Compute the manufacturing overhead cost that would be applied to Job A and Job B (Using plant wide predetermined overhead rate):
  2. Accounting homework question answer, step 1, image 1
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