Question

Maria Magneta Corp. projects total manufacturing overhead of $4.0 million for the year, $2.5 million of which is for factory supervisors' salaries and benefits. The remainder is for factory supplies and security.

The company allocates the supervisors' salaries and benefits based on direct labor hours.

Factory supplies and security is allocated based on machine hours.

The following are projected:

25,000 direct-labor hours

20,000 machine hours

a) Determine the overhead allocation rate for the factory supervisors' salaries and benefits. Show your work.

b) Determined the overhead allocation rate for factory supplies and security. Show your work.

c) Job #347 used 100 direct labor-hours and 80 machine hours. Direct materials were $5,000. Direct labor costs $85 per hours. What was the total manufacturing cost of Job #347? Show your work.

Answer 1

Rreq a:
Estimated Factory supervisor salaries and benefits					2500000
Divide: Estimated DLH					25000
OH rate per DLH					100
Req b:
Estimated Factory Supplies and Security					1,500,000
Divide: Estimated MH					20000
Ohh rate per MH					75
Req c:
Total Manufacturing cost of Job 347:
Material					5000
Labour	(100 DLH @85)				8500
Factory supervisor salaries and benefits OH applied					10000
(100 DLH @100)
factory supplies OH applied (80 MH @75)					6000
Total Manufacturing cost of Job 347:					29500