Question

Megan Company has two departments, X and Y. Overhead is applied based on direct-labor hours in Department X and machine hours in Department Y. The following additional information is available: BUDGETED AMOUNTS Department X Department Y Direct-Labor Hours 18,000 16,500 Machine Hours 51,000 40,000 Factory Overhead $225,000 $180,000 Actual Data for Job #10 Department X Department Y Direct materials $10,000 $16,000 Direct-labor cost $11,000 $14,000 Machine hours 5,000 3,000 Direct-labor hours 1,100 1,400 Required: 1. Compute the budgeted factory-overhead rate (i.e., the $ rate per activity base hour, etc.) for Department X. 2. Compute the budgeted factory-overhead rate (i.e., the $ rate per activity base hour, etc.) for Department Y. 3. What is the total overhead cost of Job #10? 4. What is the total cost of Job #10? 5. If Job 10 consists of 50 units of product, what is the unit cost of this job?

Answer 1

Part-1

Budgeted Factory Overhead Rate for Department X= Budgeted Factory Overhead/ Estiamted Labour Hour

=225000/18000= $12.5 per Labou Hour

Part-2

Budgeted Factory Overhead Rate for Department Y= Budgeted Factory Overhead/ Estiamted Machine Hour

=180000/40000= $4.5 per Machine Hour

Part- Computation of Total Overhead Cost of Job=10

Department X = (1100X12.50)=13750

Department Y= (3000X4.5)= 13500

Total Overhead Cost of job 10= (13750+13500)= 27250

Part-4: Computation of Total Cost of Job-10
	Dept X	Deptt Y	Total
Material Cost	10000	16000	$26,000.00
Labour Cost	11000	14000	$25,000.00
Overhead Cost	13750	13500	$27,250.00
Total Cost of Job-10			$78,250.00

Part-5 Unit cost of Job-10= Total Cost of Job/ No. of Unit

$78250/50=$1565 per Job

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