Exercise 2-15 Departmental Overhead Rates [LO1, LO2, LO3] Department Department

Question

Exercise 2-15 Departmental Overhead Rates [LO1, LO2, LO3]

Department

Department

Assume that the overhead rates you computed in (1) above are in effect. The job cost sheet for Job 407, which was started and completed during the year, showed the following:

Department

Would you expect substantially different amounts of overhead cost to be charged to some jobs if the company used a plantwide overhead rate based on direct labor-hours instead of using departmental rates?

Department

Milling Assembly   Direct labor-hours 6,500   86,000     Machine-hours 53,400   3,900     Total fixed manufacturing overhead cost $ 370,000   $ 488,000     Variable manufacturing overhead per machine-hour $ 2.00   -      Variable manufacturing overhead per direct labor-hour -    $ 3.75  

Explanation / Answer

Exercise 2-15 Departmental Overhead Rates [LO1, LO2, LO3] Department Department

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