MANAGERIAL ACCOUNTING ACCESS CARD
17th Edition
ISBN: 9781266165276
Author: Garrison
Publisher: MCG
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Chapter 2, Problem 13E
EXERCISE 2—13 Departmental Predetermined
White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates:
| Department | ||
| Cutting | Finishing | |
| Direct labor-hours | 6,000 | 30,000 |
| Machine-hours | 48,000 | 5,000 |
| Total fixed manufacturing overhead cost | $264,000 | $366,000 |
| Variable manufacturing overhead per machine-hour | $2.00 | - |
| Variable manufacturing overhead per direct labor-hour | - | $4.00 |
Required:
- Compute the predetermined overhead rate for each department.
- The
job cost sheet for Job 203, which was started and completed during the year, showed the following:
| Department | ||
| Cutting | Finishing | |
| Direct labor-hours | 6 | 20 |
| Machine-hours | 80 | 4 |
| Direct materials | $500 | $310 |
| Direct labor cost | $108 | $360 |
page 91
Using the predetermined overhead rates that you computed in (1) above, compute the total
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Exercise 2-13 (Static) Departmental Predetermined Overhead Rates [LO2-1, LO2-2, LO2-4]
White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a
predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing
Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates:
Department
Direct labor-hours
Machine-houre
Total fixed manufacturing overhead coat
Variable manufacturing overhead per machine-hour
Variable manufacturing overhead per direct labor-hour
Direct labor-hours
Machine-hours
Direct materials
Direct labor cost
Required:
1. Compute the predetermined overhead rate for each department.
2. The job cost sheet for Job 203, which was started and completed during the year, showed the following:
Department
Cutting
Required 1
6
NO
$ 500
$ 108
Cutting
6,000
48,000
$ 264,000
$ 2.00
Finishing
20
4
$310…
Exercise 2-13 (Algo) Departmental Predetermined Overhead Rates [LO2-1, LO2-2, LO2-4]
White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates:
Department
Cutting
Finishing
Direct labor-hours
8,200
68,000
Machine-hours
69,900
1,800
Total fixed manufacturing overhead cost
$ 390,000
$ 406,000
Variable manufacturing overhead per machine-hour
$ 4.00
—
Variable manufacturing overhead per direct labor-hour
—
$ 2.75
Required:
1. Compute the predetermined overhead rate for each department.
2. The job cost sheet for Job 203, which was started and completed during the year, showed the following:
Department
Cutting
Finishing
Direct labor-hours
3
11…
Question 2.5
James Bond, Inc., has a job-order costing system. The company uses predetermined overhead rates in applying manufacturing overhead cost to individual jobs. The predetermined overhead rate in Department A is based on machine hours, and the rate in Department B is based on direct materials cost. At the beginning of the most recent year, the company's management made the following estimates for the year:
Department
A
B
Machine-hours
80,000
20,000
Direct labour-hours
30,000
60,000
Direct materials cost
$240,250
$300,000
Direct labour cost
$270,000
$570,000
Manufacturing overhead cost
$420,000
$705,000
Job 007 entered into production on June 1st and was completed on July 12th. The company's cost records show the following information about the job:
Department
A
B
Machine-hours
450
75…
Chapter 2 Solutions
MANAGERIAL ACCOUNTING ACCESS CARD
Ch. 2.A - EXERCISE 2A-1 Activity-Based Absorption Costing...Ch. 2.A - EXERCISE 2A-2 Activity-Based Absorption Costing as...Ch. 2.A - EXERCISE 2A-3 Activity-Based Absorption Costing as...Ch. 2.A - PROBLEM 2A-4 Activity-Based Absorption Costing as...Ch. 2.A - Prob. 5PCh. 2.A -
CASE 2A-6 Activity-Based Absorption Costing and...Ch. 2.B - EXERCISE 2B-1 Overhead Rate Based on Capacity...Ch. 2.B - EXERCISE 2B-2 Overhead Rates and Capacity Issues...Ch. 2.B - Prob. 3PCh. 2.B - Prob. 4C
Ch. 2 - Prob. 1QCh. 2 - What is absorption costing?Ch. 2 - What is normal costing?Ch. 2 - How is the unit product cost of a job calculated?
Ch. 2 - Explain the four-step process used to compute a...Ch. 2 - What is the purpose of the job cost sheet in a...Ch. 2 - Explain why some production costs must be assigned...Ch. 2 - Why do companies use predetermined overhead rates...Ch. 2 - What factors should be considered in selecting an...Ch. 2 - If a company fully allocates all of its overhead...Ch. 2 - Would you expect the amount of applied overhead...Ch. 2 - Prob. 12QCh. 2 - What is a plantwide overhead rate? Whyare multiple...Ch. 2 - This Excel worksheet relates to the Dickson...Ch. 2 - This Excel worksheet relates to the Dickson...Ch. 2 - Prob. 3AECh. 2 - This Excel worksheet relates to the Dickson...Ch. 2 - Prob. 1F15Ch. 2 - Prob. 2F15Ch. 2 - Prob. 3F15Ch. 2 - Prob. 4F15Ch. 2 - Prob. 5F15Ch. 2 - Prob. 6F15Ch. 2 - Prob. 7F15Ch. 2 - Prob. 8F15Ch. 2 - Prob. 9F15Ch. 2 - Prob. 10F15Ch. 2 - Prob. 11F15Ch. 2 - Sweeten Company had no jobs in progress at the...Ch. 2 - Prob. 13F15Ch. 2 - Prob. 14F15Ch. 2 - Prob. 15F15Ch. 2 - EXERCISE 2-1 Compute a Predetermined Overhead Rate...Ch. 2 - Prob. 2ECh. 2 - EXERCISE 2–3 Computing Total Job Costs and Unit...Ch. 2 - EXERCISE 24 Computing Total Job Costs and Unit...Ch. 2 - EXERCISE 2-5 Computing Total Job Costs and Unit...Ch. 2 - Prob. 6ECh. 2 - EXERCISE 2-7 Job-Order Costing; Working Backwards...Ch. 2 - EXERCISE 2-8 Applying Overhead Cost; Computing...Ch. 2 - EXERCISE 2–9 Job-Order Costing and Decision Making...Ch. 2 - Prob. 10ECh. 2 - Prob. 11ECh. 2 - Prob. 12ECh. 2 - EXERCISE 2—13 Departmental Predetermined Overhead...Ch. 2 - EXERCISE 214 Job-Orders Costing for a Service...Ch. 2 - Prob. 15ECh. 2 - PROBLEM 2—16 Plantwide Predetermined Overhead...Ch. 2 - PROBLEM 217 Plantwide and Departmental...Ch. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - Prob. 20PCh. 2 - PROBLEM 2-21 Plant wide Versus Multiple...Ch. 2 - CASE 2-22 Plantwide versus Departmental Overhead...
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