White Company has two departments, Cutting and Finishing. The
company uses a job-order costing system and computes a
predetermined overhead rate in each department. The Cutting
Department bases its rate on machine-hours, and the Finishing
Department bases its rate on direct labor-hours. At the beginning
of the year, the company made the following estimates:
|
Department |
|
Cutting |
Finishing |
| Direct labor-hours |
|
7,100 |
|
69,000 |
| Machine-hours |
|
50,400 |
|
1,700 |
| Total fixed manufacturing overhead cost |
$ |
370,000 |
$ |
557,000 |
| Variable manufacturing overhead per machine-hour |
$ |
2.00 |
|
— |
| Variable manufacturing overhead per direct labor-hour |
|
— |
$ |
3.75 |
|
Required:
1. Compute the predetermined overhead rate for each
department.
2. The job cost sheet for Job 203, which was started and
completed during the year, showed the following:
|
Department |
|
Cutting |
Finishing |
| Direct labor-hours |
|
|
4 |
|
|
|
11 |
|
| Machine-hours |
|
|
82 |
|
|
|
5 |
|
| Direct materials |
|
$ |
740 |
|
|
$ |
350 |
|
| Direct labor cost |
|
$ |
72 |
|
|
$ |
198 |
|
|
Using the predetermined overhead rates that you computed in
requirement (1), compute the total manufacturing cost assigned to
Job 203.
