peoductio and compurtes a predetermined overtbead rate in each production n depa
ID: 2406390 • Letter: P
Question
peoductio and compurtes a predetermined overtbead rate in each production n departments, Milling and inishing The company uses Tcel Coporsin a dkpwtncst. The Milling Deartmentsedetemined overbead rate is based o ad e Firishng Department's hebgg af the ter, the oompeny hod made thefollowing estimates- has two predetermined overbead rate is baeed on diroct labor-hours. A Milling Finishing 14,000 6,000 91,800 04,200 17,000 1,000 Diect labor-hoars Tol narufactaring overhead cost Daring the CuETemonth the company started and finished Job MS6S. The following date were econded for ths jah: bM365 Milling Finishing Direct lbor-boars Direct mnteials Direct labor cost TO 10 S750 5340 20 10 $360 $1,360 S340 $1,360 a. Caleulxe the eta b. Calculate the total jioh ost for Job M565. c Calculate th e seling price for Job M565 ?fte comp an mount of oveead aplid to Job M565 in both departmests 20% to determine selling prices. y marks up its unit product cosis byExplanation / Answer
Answers
Working
Department
Milling
Finishing
A
Overhead cost
$ 91,800.00
$ 64,200.00
Allocation base for predetermined overhead rate
Machine hours
Direct labor hours
B
Total of allocation base
17000
6000
C=A/B
Predetermined Overhead rate
$ 5.40 per machine hours
$ 10.70 per direct labor hours
Milling Department:
C
No. of machine hours
70
D
Predetermined Overhead rate
$ 5.40 per machine hours
E = C x D
Overhead cost applied
$ 378.00
Finishing Department:
I
No. of direct labor hours
40
J
Predetermined Overhead rate
$ 10.70 per direct labor hours
K = I x J
Overhead cost applied
$ 428.00
Total Job Cost calculation
JOB M565
Milling Department:
A
Direct material
$ 750.00
B
Direct Labor cost
$ 340.00
C
No. of machine hours
70
D
Predetermined Overhead rate
$ 5.40
E = C x D
Overhead cost allocated
$ 378.00
F = A+B+E
Total
$ 1,468.00
Finishing Department:
G
Direct material
$ 360.00
H
Direct Labor cost
$ 1,360.00
I
No. of direct labor hours
40
J
Predetermined Overhead rate
$ 10.70
K = I x J
Overhead cost allocated
$ 428.00
L = G+H+K
Total
$ 2,148.00
M = F + L
Total Cost for the Job
$ 3,616.00
Calculation of Selling Price for the Job
M [calculated in Requirement 2]
Total Cost for the Job
$ 3,616.00
N = M x 20%
Mark-up 20%
$ 723.20
O= M+N
Total Selling Price
$ 4,339.20
Working
Department
Milling
Finishing
A
Overhead cost
$ 91,800.00
$ 64,200.00
Allocation base for predetermined overhead rate
Machine hours
Direct labor hours
B
Total of allocation base
17000
6000
C=A/B
Predetermined Overhead rate
$ 5.40 per machine hours
$ 10.70 per direct labor hours
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