70.2K

Verified Solution

Link Copied!

All of a company's manufacturing overhead costs are considered to be fixed costs. The company has two departments and the overhead estimates for the year and for one job (Order #5112) completed during the year are in the following tables. Estimated Data Assembly Finishing Total Manufacturing overhead costs $ 3,200,000 $3,600,000 $5,000,000 Direct labor-hours 100,000 68,000 160,000 Machine-hours 40,000 200.000 240.000 Order 1 5112 Direct labor-hours Machine hours Assembly 21 13 Finishing 16 Total 34 29 Required: 1. Assume the company uses a plantwide predetermined overhead rate based on direct labor hours. Compute the predetermined overhead rate and the amount of manufacturing overhead applied to Order #5112. 2. Compute the predetermined overhead rates for each department and the manufacturing overhead applied to Order #5112 if the company uses departmental predetermined overhead rates. Use direct labor-hours as the allocation base in Assembly and machine hours as the allocation base in Finishing (Round your intermediate calculation to 2 decimal places.) 1. Plantwade predetermined overhead rate Plantwide manufacturing overhead applied to Order #5112 2 Assembly Department predetermined overhead rate Manufacturing overhead applied from Assembly to Order #5112 Finishing Department predetermined overhead rate Manufacturing overhead applied from Finishing to Order #5112 Total departmental manufacturing overhead noplied to Order #5112 3. Which method to assign overhead do you recommend and why

Answer & Explanation Solved by verified expert

See Answer