 |
|
| Browse | Ask | Answer | Search | Join/Login |
|
|
||||
|
Overhead Rate Calculation.
Thomas Company uses a job costing system at its plant. The plant has two production departments – Machining and Assembly. Its job-costing system has two direct cost categories (direct materials and direct manufacturing labour) and two manufacturing overhead cost pools (the Machining Department, allocated using machine hours and the Assembly Department, allocated using direct manufacturing labour costs). The 2012 budget for the plant is as follows:
Machining Dept.:- Manufacturing Overhead =$1,800,000 Direct manufacturing labour cost =$1,400,000 Direct manufacturing labour hours =$ 100,000 Machine hours =$ 50,000 Assembly Dept.:- Manufacturing Overhead =$3,600,000 Direct manufacturing labour cost = $2,000,000 Direct manufacturing labour hours =$ 200,000 Machine hours = $ 200,000 Question: a) Calculate an overhead rate for each department. My Solution: Am I Right? Machining Dept. 1,800,000 overhead / 50,000 machine hours = $36 per machine hour Assembly Dept. 3,600,000 overhead / 2,000,000 labor costs = $1.80 per $1 labor costs |
||||
Check out some similar questions!
The management of Sharrar Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity rather than on the estimated amount of activity for the year. The company's controller has proveded an example to illustrate how this new system would...
How do you calculate the overhead application rate?
How do I put an overhead figure on a job estimate that there is no cost of goods. My overhead is 30,000 a month. I am using all my people that are part of the overhead
B3 Company is a manufacturing firm that uses job-order costing. The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 24,000 machine-hours and incur $216,000 in manufacturing overhead...
View more questions Search
| Question Tools | Search this Question |
Add your answer here.
|
