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× Y1 ×Ya Microsoft Office Herme ?d, Mal . accountsOjgarce.xyE Connect is file' cant open pics[Soled cure https//newconnect.m? flow/connect.htm ter 2 and 28 6 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: Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable sanufacturing overhead per machine-hour Variable sanufacturing overhead per direct labor-hour 73,000 1,200 390,9491,900 61.180 3.ee S 3.75 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: nes Department Cutting Finishi 18 Direct labor hours Machine-hours Direct materials Direct labor cost $770 $370 144$ 432 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 the question by entering your answers in the tabs given below K Prex of 7 Next >

Explanation / Answer

Req 1: Pre determined OH rate: Cutting: Fixed (390000/61100) 6.38 Variable 3 Total OH rate per MH 9.38 Finishing: Fixed (491000/73000) 6.73 Variable 3.75 Total OH rate per DLH 10.48 Req 2: Total Manufacturing Cost Cutting Finishing Total Material 770 370 1140 Labour 144 432 576 OH 825.44 188.64 1014.08 Total Manufacturing cost 1739.44 990.64 2730.08 Req 3: Yes, It will be different overheads cost if applied on the basis of Plantwide oh rate based n DLH. This is because some of the processes is totally machine intensive and thus labour hours consumed is quite low. This is will result in difference in overheads ccost based on plantwide OH rate and Departmental OH rate.

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