predetermined overhead rate for the Forming Department is closest to:
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 15P: The following information, taken from the books of Herman Brothers Manufacturing represents the...
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Hickingbottom Corporation has two production departments, Forming and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:
During the current month the company started and finished Job M381. The following data were recorded for this job:
The predetermined overhead rate for the Forming Department is closest to:
Forming | Finishing | |||
Machine-hours | 17,000 | 15,000 | ||
Direct labor-hours | 1,000 | 7,000 | ||
Total fixed |
$ | 96,900 | $ | 65,800 |
Variable manufacturing overhead per machine-hour | $ | 2.00 | ||
Variable manufacturing overhead per direct labor-hour | $ | 3.60 |
During the current month the company started and finished Job M381. The following data were recorded for this job:
Job M381: | Forming | Finishing | ||
Machine-hours | 80 | 30 | ||
Direct labor-hours | 30 | 40 | ||
Direct materials | $ | 840 | $ | 350 |
Direct labor cost | $ | 750 | $ | 1,000 |
$18.70 per machine-hour
|
||
$7.70 per machine-hour
|
||
$2.00 per machine-hour
|
||
$5.70 per machine-hour
|
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