EXERCISE 2-12. Allocating Manufacturing Overhead to Jobs LO 6, 7 Webber Fabricat
ID: 2434784 • Letter: E
Question
EXERCISE 2-12.Allocating Manufacturing Overhead to Jobs LO 6, 7 Webber Fabricating estimated the following annual costs.
Expected annual direct labor hours 40,000
Expected annual direct labor cost $ 625,000
Expected machine hours 20,000
Expected material cost for the year $ 800,000
Expected manufacturing overhead $1,000,000
a. Calculate overhead allocation rates using each of the four possible allocation bases provided.
b. Determine the cost of the following job (number 253) using each of the four overhead allocation rates.
Job 253
Direct materials $3,000
Direct labor (150 hrs @ $12/hr) $1,800
Machine hours used 150
Explanation / Answer
a Expected Manufacturing OH 1,000,000.00 Expected Annual Direct Labor Hours 40,000.00 MOH per DLH( 1,000,000 / 40,000 ) 25.00 Expected Machine hours 20,000.00 MOH per DMH(1,000,000 /20,000 ) 50.00 Expected Direct Labor Cost 625,000.00 MOH as a percentage of DLC 160.00 (100 * 1,000,000) / 625,000 Expected Direct Material Cost 800,000.00 MOH as a percentage of DMC (100 * 1,000,000) / 800,000 125.00 b Job 253 MOH Based on Direct Labor Hours Direct Material 3,000.00 Direct Labor 1,800.00 MOH (150 * 25 ) 3,750.00 Total Cost 8,550.00 MOH Based on Direct Machine Hours Direct Material 3,000.00 Direct Labor 1,800.00 MOH (150 * 50 ) 7,500.00 Total Cost 12,300.00 MOH Based on Direct Labor Cost Direct Material 3,000.00 Direct Labor 1,800.00 MOH (1800 *1.6) 2,880.00 Total Cost 7,680.00 MOH Based on Direct Material Cost Direct Material 3,000.00 Direct Labor 1,800.00 MOH (3000 *1.25) 3,750.00 Total Cost 8,550.00
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.