Question

White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates:

	Department
	Cutting		Finishing
Direct labor-hours		6,800		89,000
Machine-hours		50,300		2,800
Total fixed manufacturing overhead cost	$	390,000	$	520,000
Variable manufacturing overhead per machine-hour	$	4.00		—
Variable manufacturing overhead per direct labor-hour		—	$	3.75

Required:

2. The job cost sheet for Job 203, which was started and completed during the year, showed the following:

	Department
	Cutting				Finishing
Direct labor-hours			5				11
Machine-hours			84				4
Direct materials		$	770			$	370
Direct labor cost		$	110			$	242

Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203.

These are the rates I computed. 11.75 cutting and 9.59 finishing.

Answer 1

	Cutting	Finishing
Fixed Manufacturing OH	7.75	5.84
Variable Overhead	4.00	3.75
Total OH	11.75	9.59

	Cutting	Finishing	Total
Direct Material Cost	770.00	370.00	1,140.00
Direct Labor Cost	110.00	242.00	352.00
Overhead Applied			-
Cutting (11.75*84)	987.00		987.00
Finishing (9.59*11)		105.49	105.49
Total Manufacturing cost	1,867.00	717.49	2,584.49