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https://gyazo.com/06006f248183459def53f64f49efeb6f (page 2)
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Week 4 Homework - Chapter 2 BA213 Managerial Accounting On-Campus: BA213 W2016 On-Campus 'Blast it!" said David Wilson, president ot Teledex Company. Vvie've just lost the bd on the Koopers job by S4.000. It seems we're either too high to get the Job or too low to make any money on half the jobs we b>>d.' Teiedex Company manufactures products to customers- specifications and operates a Job order costing system. Manufacturing overhead cost is apped to jobs on the basis of direct labor cost. The following estimates were made at the beginning of the year. Department Fabricating Machining Assembly Total Plant Direct labor $210,000 $105,000 $ 315,000 $ 630.000 Manufacturing overhead $367,500 $420,000 $ 94,500 $ 882,000 Jobs reqilre varying amounts ot work in the three departments. The Koopers Job. for example, would have required manufacturing costs in the three departments as fotows: Department Fabocaung Machining Assembly Total Plant The company uses a plantwtde overhead rate to apply manufacturing overhead cost to jobs. Required: Assurring use of a p*antw*de overhead rate: Compute the rate for the current year. Predetermined overhead rate Determine the amount o( manufacturing overhead cost that would have been applied to the Koopers job. Manufacturing overhead cost Suppose that instead ot using a overhead rate, the company had used a separate predetermined overhead rate in each department. Under these conations:Explanation / Answer
1.
a) Predetermined overhead rate = Total manufacturing OH cost / Total labour cost
= 882,000/ 630,000 = 140%
b) Manufacturing OH of Kapoor job will be=12,600*140/100= $17,640
2.
a) Fabricating= 4800*14/100 = $6720
Machining= 600*140/100 =$840
Assembly = 7200*140/100 =$10080
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