Bierce Corporation has two manufacturing departments--Machining and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:
| Machining | Finishing | Total | ||||
| Estimated total machine-hours (MHs) | 6,000 | 4,000 | 10,000 | |||
| Estimated total fixed manufacturing overhead cost | $ | 10,200 | $ | 24,400 | $ | 34,600 |
| Estimated variable manufacturing overhead cost per MH | $ | 2.30 | $ | 4.00 | ||
During the most recent month, the company started and completed two jobs--Job B and Job K. There were no beginning inventories. Data concerning those two jobs follow:
| Job B | Job K | |||||
| Direct materials | $ | 21,400 | $ | 8,400 | ||
| Direct labor cost | $ | 21,600 | $ | 8,400 | ||
| Machining machine-hours |
3,300 | 2,700 | ||||
| Finishing machine-hours | 400 | 3,600 | ||||
Required:
a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. (Round your answer to 2 decimal places.)
b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job B. (Do not round intermediate calculations.)
c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job K. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)
d. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. What is the departmental predetermined overhead rate in the Machining department? (Round your answer to 2 decimal places.)
e. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. What is the departmental predetermined overhead rate in the Finishing department? (Round your answer to 2 decimal places.)
f. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job B? (Do not round intermediate calculations.)
g. Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. How much manufacturing overhead will be applied to Job K?. (Do not round intermediate calculations.)
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A) plant wide overhead rate calculation
|
Particulars |
Amount |
|
Variable overhead |
|
|
- machining(6000*$2.3) |
$13800 |
|
- finishing (4000*$4) |
$16000 |
|
Fixed overhead |
$34600 |
|
Total overhead |
$64400 |
|
÷ total hours |
10000 hours |
|
Plant wide overhead rate |
$6.64 per hour |
B) overhead applied to job B
= Total machine hours * overhead rate
= (3300+400)*$6.64
=$24,568
C) overhead applied to job K
= (2700+3600)*$6.64
= $41832
D) department overhead rate machining department
Overhead = (6000*$2.3) +$10200 = $24000
Rate = $24000/6000
= $4 per machining machine hour
E) finishing department
Overhead = (4000*$4) + $24400
= $40400
Rate = $40400/4000 = $10.1
F) job B
Machining department overhead = 3300*$4 = $13200
Finishing department = 400*$10.1 = $4040
Total overhead = $17240
G) Job K
Machining = 2700*$4 = $10800
Finishing = 3600*$10.1 = $36360
Total overhead = $47160
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