X Company has two production departments, A and B. At the start of the year, the
ID: 2407146 • Letter: X
Question
X Company has two production departments, A and B. At the start of the year, the following budgeted information is available: Department A Overhead Direct labor hours Machine hours $4,500,000 50,000 120,000 Department B Overhead Direct labor hours Machine hours $1,900,000 50,000 130,000 The following information is for two specific jobs, Job 111 and Job 222, that were completed during the year: Department A Department B Job 111 Direct labor hours Machine hours 809 1,080 272 890 ob 222 Direct labor hours Machine hours 313 1,220 599 750 4. Using a plantwide allocation system with direct labor hours as the cost driver, what is the allocation to Job 222 (round overhead rates to two decimal places)? 14.25 Submit Answer Incorrect. Tries 1/3 Previous Tries 5. Using a departmental allocation system with direct labor hours as the cost driver in Department A and machine hours as the cost driver in Department B, what is the allocation to Job 222 (round overhead rates to two decimal places)? Submit Answer Tries 0/3Explanation / Answer
Answer =1 CALCULATION OF THE RECOVERY RATE OF OVERHEAD FOR DEPARTMENT A WITH DIRECT LABOUR HOURS Overhead Cost "/" Direct Labour Hours "=" Overhead Rate Per hours $ 45,00,000 "/" $ 50,000 "=" $ 90 COST ALLOCATIO TO THE DEPARTMEN A = Job 222 "x" Overhead rate = Direct Labour Hours 313 "x" $ 90 $ 28,170 Machine Hours 1220 "x" $ 90 $ 1,09,800 Total Cost $ 1,37,970 CALCULATION OF THE RECOVERY RATE OF OVERHEAD FOR DEPARTMENT B WITH MACHIENE HOURS Overhead Cost "/" Machiene Hours "=" Overhead Rate Per hours $ 19,00,000 "/" $ 1,30,000 "=" $ 15 COST ALLOCATION TO THE DEPARTMEN B = Job 222 "x" Overhead rate = Direct Labour Hours 599 "x" $ 15 $ 8,755 Machine Hours 750 "x" $ 15 $ 10,962 Total Cost $ 19,716
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