Answer Happy

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 30,000 Direct labor-hours Machine-hours 6,000 48,000 5,000 Total fixed manufacturing overhead cost $ 264,000 $366,000 0 $ 2.00 Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 0 $ 4.00 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 6 20 Direct labor-hours Machine-hours 80 4 $ 500 $310 Direct materials Direct labor cost $ 108 $360 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to 203. 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwi predetermined overhead rate based on direct labor-hours, rather than using departmental rates? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the predetermined overhead rate for each department. (Round your answers to 2 decimal places.) Finishing Department Predetermined overhead rate Cutting Department per MH per DLH Required 2 > < Required 1
Finishing Cutting 6,000 30,000 Direct labor-hours Machine-hours. 48,000 Total fixed manufacturing overhead cost $ 264,000 5,000 $366,000 0 $ 2.00 Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 0 $4.00 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 20 6 Direct labor-hours Machine-hours 80 Direct materials $ 500 Direct labor cost $ 310 $360 $ 108 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. (Round intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.) Total manufacturing cost 4 < Required 1 Required 3 >