EXHIBIT 2-5 Dickson Company: An Example Using Multiple Predetermined Overhead Rates Step 1: Calculate the estimated tota

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Exhibit 2 5 Dickson Company An Example Using Multiple Predetermined Overhead Rates Step 1 Calculate The Estimated Tota 1 (93.61 KiB) Viewed 3 times

EXHIBIT 2-5 Dickson Company: An Example Using Multiple Predetermined Overhead Rates Step 1: Calculate the estimated total manufacturing overhead cost for each department. Milling Department Overhead Cost (Y): Assembly Department Overhead Cost (Y): = $500,000 + ($3.75 per DLH x 80,000 DLHS) = $500,000+ $300,000 = $390,000 + ($2.00 per MH × 60,000 MHS) = $390,000+ $120,000 = $510,000 = $800,000 Step 2: Calculate the predetermined overhead rate in each department. Milling Department Overhead Rate: $510,000 $800,000 60,000 machine-hours 80,000 direct labor-hours = = $8.50 per machine-hour = $10.00 per direct labor-hour Step 3: Calculate the amount of overhead applied from both departments to Job 407. Milling Department: Overhead Applied to Job 407 = $8.50 per MH x 90 MHs = $765 Step 4: Calculate the total job cost for Job 407. Direct materials Direct labor Manufacturing overhead applied Total cost of Job 407 Assembly Department Overhead Rate: Assembly Department: Overhead Applied to Job 407 = $10.00 per DLH × 20 DLHs = $200 Step 5: Calculate the selling price for Job 407. Total cost of Job 407 Markup ($2,485 x 75%) Selling price of Job 407 Milling $800 $70 $765 Assembly $370 $280 $200 $2,485.00 1,863.75 $4,348.75 Total $ 1,170 350 965 $2,485
2. Change the total fixed manufacturing overhead cost for the Milling Department in Data area back to $390,000, keeping all of the other data the same as in the original example. Consider a new job, Job 408, with the following characteristics: A 1 Chapter 2: Applying Excel 2 3 4 5 6 Direct labor-hours 7 Direct materials cost 8 Direct labor cost Cost summary for Job 408 Machine-hours $ $ Selling price for Job 408 B Department Milling 90 с Assembly 8 680 $ 152 $ 4 40 380 680 In your worksheet, enter this new data in the cells for Job 407. What is the new selling price for Job 408? (Round your final answer to 2 decimal places.)
3. Without changing the data for the job from requirement 2 above, what is the selling price for Job 408 if the total number of machine- hours in the Assembly Department increases from 3,000 machine-hours to 6,000 machine-hours? (Round your final answer to 2 decimal places.) Selling price for Job 408 4. Restore the total number of machine-hours in the Assembly Department to 3,000 machine-hours. And keep the job data the same as it was in Requirement 2. What is the selling price for Job 408 if the total number of direct labor-hours in the Assembly Department decreases from 80,000 direct labor-hours to 40,000 direct labor-hours? (Round your final answer to 2 decimal places.) Selling price for Job 408