Asked by OfficialAuzzi Clitnovici on May 30, 2024

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Bulla Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:
Bulla Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:    During the current month the company started and finished Job K369. The following data were recorded for this job:    Required:Calculate the total amount of overhead applied to Job K369 in both departments. (Do not round intermediate calculations.) During the current month the company started and finished Job K369. The following data were recorded for this job:
Bulla Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:    During the current month the company started and finished Job K369. The following data were recorded for this job:    Required:Calculate the total amount of overhead applied to Job K369 in both departments. (Do not round intermediate calculations.) Required:Calculate the total amount of overhead applied to Job K369 in both departments. (Do not round intermediate calculations.)

Predetermined Overhead Rate

A rate established in advance to allocate overhead costs to products or services based on a specific activity base.

Machine-Hours

A measure of production time where one machine-hour equals the operation of one machine for one hour.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, used as a base for allocating overhead costs to products.

  • Infer the application of manufacturing overhead on jobs, anchored by machine hours and labor hours.
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MK
Marcel KrolczykJun 01, 2024
Final Answer :
Machining Department:Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department)= $98,800 + ($2.10 per machine-hour × 19,000 machine-hours)= $98,800 + $39,900 = $138,700Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $138,700 ÷ 19,000 machine-hours = $7.30 per machine-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.30 per machine-hour × 90 machine-hours = $657Customizing Department:Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department)= $84,600 + ($3.60 per direct labor-hour × 9,000 direct labor-hours)= $84,600 + $32,400 = $117,000Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $117,000 ÷9,000 direct labor-hours = $13.00 per direct labor-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.00 per direct labor-hour × 50 direct labor-hours = $650Overhead applied to Job K369
Machining Department:Machining Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department)= $98,800 + ($2.10 per machine-hour × 19,000 machine-hours)= $98,800 + $39,900 = $138,700Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $138,700 ÷ 19,000 machine-hours = $7.30 per machine-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.30 per machine-hour × 90 machine-hours = $657Customizing Department:Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department)= $84,600 + ($3.60 per direct labor-hour × 9,000 direct labor-hours)= $84,600 + $32,400 = $117,000Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $117,000 ÷9,000 direct labor-hours = $13.00 per direct labor-hourOverhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $13.00 per direct labor-hour × 50 direct labor-hours = $650Overhead applied to Job K369