Chapter 2 Guiz Help Save & Exit Submit Deloria Corporation has two production de

Question

Chapter 2 Guiz Help Save & Exit Submit Deloria Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour variable manufacturing overhead per direct labor- hour rorming 19,000 d,000 $129,200 $ 1.60 Assembly 15,000 8,000 $77,600 $ 3.00 During the current month the company started and finished Job T2B8. The following data were recorded for this job Job T288: Machine-hours Direct labor-hours Direct materials Direct labor cost Forming Assembly 10 40 380 $1,200 80 30 730 $ 900 e estimated total manufacturing overhead for the Assembly Department is closest to: Multiple Choice $77,600 $101,600 $56,674 $24,000

Explanation / Answer

Estimated manufacturing overhead of assembly department = Variable manufacturing overhead+fixed manufacturing overhead

= (8000*3)+77600

Estimated manufacturing overhead of assembly department = 101600

so answer is b) $101,600

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