Question

Mason Company has two manufacturing departments—Machining and Assembly. The company considers all of its manufacturing overhead costs to be fixed costs. It provided the following estimates at the beginning of the year as well as the following information with respect to Jobs A and B:

Estimated Data	Machining			Assembly			Total
Manufacturing overhead	$	7,056,000		$	441,000		$	7,497,000
Direct labor-hours		21,000			336,000			357,000
Machine-hours		336,000			16,000			352,000

Job A	Machining	Assembly	Total
Direct labor-hours	5	10	15
Machine-hours	11	2	13

Job B	Machining	Assembly	Total
Direct labor-hours	4	5	9
Machine-hours	12	3	15

Required:

1.A.) If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how much manufacturing overhead cost would be applied to Job A? Job B?

1.B.) Assume that Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based on machine-hours and the Assembly Department is allocated based on direct labor-hours. How much manufacturing overhead cost would be applied to Job A? Job B? (Round your intermediate calculations and final answers to 2 decimal places.)

Answer 1