Question

Ignatenko Company Manfactures a line of Lightweight running shoes. CEO Alonga ignatenko estimeated that the company...

Ignatenko Company Manfactures a line of Lightweight running shoes. CEO Alonga ignatenko estimeated that the company would incur 2400000 in manfuacturing Overhead during the coming year. Additionally, she estimated the company would operate at a level requiring 200000 direct labor hours and 500000 machine hours.

a, Assume that Ignatenko Company Uses Direct labor Hours As its manfacturing overhead application base. Calculate the Company's predertermined Overhead rate.

b, Assume that job 3574 required 250 direct labor hours to complete. How much manufacturing overhead should be applied to the job?

c, Assume, instead, that Ignatenko Company used machine hours as its manufacturing overhead application base. Calculate the company's perdetermined overhead rate.

d Assume that job 3574 required 600 machine hours to complete. How much manfacturing overhead should be applied to the job?

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Answer #1
  • All working forms part of the answer
  • Requirement ‘a’

A

Manufacturing overhead ($)

2400000

B

Direct labor hours

200000

C=A/B

Predetermined Overhead rate

$12 per direct labor hour

  • Requirement ‘b’

A

Job 3574 Direct labor hours

250

B

Predetermined Overhead rate

$12

C=AxB

Manufacturing Overhead applied

$3000

  • Requirement ‘c’

A

Manufacturing overhead ($)

2400000

B

Machine hours

500000

C=A/B

Predetermined Overhead rate

$4.8 per machine hours

  • Requirement ‘d’

A

Job 3574 Direct labor hours

600

B

Predetermined Overhead rate

$4.8

C=AxB

Manufacturing Overhead applied

$2880

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