The Canadian Company in Dubai uses a job-costing system at its production plant. The plant has a machining department and an assembly department. The company uses normal costing with two direct-cost categories: Direct materials Direct manufacturing labor Furthermore, the company uses two manufacturing overhead cost pools: Machining department with machine- hours as the allocation base Assembly department with direct manufacturing labor costs as the allocation base. The budget for the plant in 2020 is as follows: Production plant Machine department Assembly department Manufacturing overhead costs 13 597 500 12 271 500 Direct manufacturing labor costs 1 455 000 6 075 000 Direct manufacturing labor-hours 54 000 22 500 Machine-hours 277 500 55 500 What is the budgeted manufacturing overhead rate in the machining and the assembly department? During the month of January 2020, the job-cost record for Job 123 shows the following: Job 123: Machine Department Assembly Department Manufacturing overhead costs 19 500 7 500 Direct manufacturing labor costs 1 350 1 875 Direct manufacturing labor-hours 30 105 Machine-hours 210 30 Compute the total manufacturing overhead cost allocated to Job 123. Assume that Job 123 produced 450 units, calculate the cost per unit. Assume the following amounts appeared at the end of 2020: Production plant Machine department Assembly department Manufacturing overhead costs incurred 15 000 000 11 973 000 Direct manufacturing labor costs 1 545 000 6 150 000 Machine-hours 300 000 51 000 5 Compute the under- or overallocated manufacturing overhead for each department and for the production plant as a whole. Briefly explain why Canadian Company in Dubai uses two different manufacturing overhead cost pools in its job-costing system?

The Canadian Company in Dubai uses a job-costing system at its production plant. The plant has a machining department and an assembly department. The company uses normal costing with two direct-cost categories: Direct materials Direct manufacturing labor Furthermore, the company uses two manufacturing overhead cost pools: Machining department with machine- hours as the allocation base Assembly department with direct manufacturing labor costs as the allocation base. The budget for the plant in 2020 is as follows: Production plant Machine department Assembly department Manufacturing overhead costs 13 597 500 12 271 500 Direct manufacturing labor costs 1 455 000 6 075 000 Direct manufacturing labor-hours 54 000 22 500 Machine-hours 277 500 55 500 What is the budgeted manufacturing overhead rate in the machining and the assembly department? During the month of January 2020, the job-cost record for Job 123 shows the following: Job 123: Machine Department Assembly Department Manufacturing overhead costs 19 500 7 500 Direct manufacturing labor costs 1 350 1 875 Direct manufacturing labor-hours 30 105 Machine-hours 210 30 Compute the total manufacturing overhead cost allocated to Job 123. Assume that Job 123 produced 450 units, calculate the cost per unit. Assume the following amounts appeared at the end of 2020: Production plant Machine department Assembly department Manufacturing overhead costs incurred 15 000 000 11 973 000 Direct manufacturing labor costs 1 545 000 6 150 000 Machine-hours 300 000 51 000 5 Compute the under- or overallocated manufacturing overhead for each department and for the production plant as a whole. Briefly explain why Canadian Company in Dubai uses two different manufacturing overhead cost pools in its job-costing system?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...

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The Canadian Company in Dubai uses a job-costing system at its production plant. The plant has a machining department and an assembly department.

The company uses normal costing with two direct-cost categories:

Direct materials
Direct manufacturing labor

Furthermore, the company uses two manufacturing overhead cost pools:

Machining department with machine- hours as the allocation base
Assembly department with direct manufacturing labor costs as the allocation base.

The budget for the plant in 2020 is as follows:

Production plant

Machine department

Assembly department

Manufacturing overhead costs

13 597 500

12 271 500

Direct manufacturing labor costs

1 455 000

6 075 000

Direct manufacturing labor-hours

54 000

22 500

Machine-hours

277 500

55 500

What is the budgeted manufacturing overhead rate in the machining and the assembly department?

During the month of January 2020, the job-cost record for Job 123 shows the following:

Job 123:

Machine Department

Assembly Department

Manufacturing overhead costs

19 500

7 500

Direct manufacturing labor costs

1 350

1 875

Direct manufacturing labor-hours

105

Machine-hours

210

Compute the total manufacturing overhead cost allocated to Job 123.

Assume that Job 123 produced 450 units, calculate the cost per unit.

Assume the following amounts appeared at the end of 2020:

Production plant	Machine department	Assembly department
Manufacturing overhead costs incurred	15 000 000	11 973 000
Direct manufacturing labor costs	1 545 000	6 150 000
Machine-hours	300 000	51 000

5 Compute the under- or overallocated manufacturing overhead for each department and for the production plant as a whole.

Briefly explain why Canadian Company in Dubai uses two different manufacturing overhead cost pools in its job-costing system?

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