WoodGrain Technology makes home office furniture from fine hardwoods. The compan

Question

WoodGrain Technology makes home office furniture from fine hardwoods. The company uses a job-order costing system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Preparation Department is based on machine hours, and the rate in the Fabrication Department is based on direct labor-hours. At the beginning of the year, the company’s management made the following estimates for the year:

      

Job 127 was started on April 1 and completed on May 12. The company's cost records show the following information concerning the job:

Requred:    

1. Compute the predetermined overhead rate used during the year in the Preparation Department. Compute the rate used in the Fabrication Department. (Round predetermined overhead rate to 2 decimal places.)

Preperation department: Per MH

Fabrication department: Per DLH

2. Compute the total overhead cost applied to Job 127. (Round predetermined overhead rate to 2 decimal places and round your final answer to nearest whole dollar.)

   Total overhead cost:

3-a. What would be the total cost recorded for Job 127? (Round your predetermined overhead rate and intermediate calculations to 2 decimal places and round your final answer to nearest whole dollar.)

Department

Preparation Fabrication Total

Direct materials

Direct labor

Manufacturing overhead

Total cost

3-b. If the job contained 34 units, what would be the unit product cost? (Round predetermined overhead rate and final answer to 2 decimal places.)

unit product cost:

4. At the end of the year, the records of WoodGrain Technology revealed the following actual cost and operating data for all jobs worked on during the year: (Round predetermined overhead rate to 2 decimal places.)

      

What was the amount of underapplied or overapplied overhead in each department at the end of the year?

Preperation department:

Fabrication department:

Department Preparation Fabrication Machine-hours 80,000 40,000 Direct labor-hours 33,000 50,100 Direct materials cost $ 192,000 $ 202,000 Direct labor cost $ 271,000 $ 513,000 Fixed manufacturing overhead cost $ 232,000 $ 470,940 Variable manufacturing overhead per machine-hour $ 2.40 - Variable manufacturing overhead per direct labor-hour - $ 4.40

Explanation / Answer

1)Preparation department:

Fixed overhead per MH =Estimated overhead/estimated MH

                   = 232000/80000

                  = $ 2.9 per MH

predetermined overhead rate = 2.4+2.9 = $ 5.3 per MH

Fabrication department:

Fixed overhead per direct labor hour =470940/50100 =9.4

Predetermined overhead = 4.4+9.4= 13.80 per DLH

2)Preparation overhead:5.3*370= 1961

Fabrication overhead :13.80*135 = $1863

Total overhead =1961+1863= 3824

3)a

3b)unit cost =Total /units

   = 7722/34

   = $ 227.12

4)

preparation Fabrication Total Direct material 938 1240 2178 Direct labor 740 980 1720 overhead 1961 1863 3824 Total 3639 4083 7722

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