Diewoid Company has two departments, Miing and Assembly. The company uses a job-

Question

Diewoid Company has two departments, Miing and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The labor-hours. At the beginning of the year, the company made the following Miling Department bases its rate on machine-hours, and the Assembly Department bases its rate on direct estimates: Deport 80,000 3,000 $390,00D $ 500,000 8,000 Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overbead per direct labor-hour 60,000 2.00 S 3.75 Required .Compute the predetermined overhead rate to be used in each department (Round your answers to 2 decimal places.) As per DUH per MH rate me that the overhead raten you computed in (1) above are in offect The joo cost sheet for Job 407, which was started and completed during the year, showed the folowing 20 Drect labor-hours 90 $ 800 370 Materials requisitioned Direct labor cost 45 $ 160

Explanation / Answer

Req 1: Pre-determined OH rate: Milling: Estimated OH/ machine hours = $ 390000/60000= $ 6.50 per MH Assembly: Eestimated overheads / Labour hours = $ 500,000 /80,000 = $6.25 per Labour hour Req 2: TOTAL MANUFACTURING COSTT ASSIGNED TO JOB 407: Material cost (800+370) 1170 Labour (45+160) 205 Overheads assigned: Miling (90 MH @ 6.50) 585 Assembly (20 LH @ $6.25) 125 Total cost 2085 Req 3: Yes

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