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In: Accounting

16. Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing...

16.

Eisentrout 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:

Machining Customizing
Machine-hours 24,000 25,000
Direct labor-hours 20,000 7,000
Total fixed manufacturing overhead cost $79,200 $31,500
Variable manufacturing overhead per machine-hour $2.00
Variable manufacturing overhead per direct labor-hour $3.50

During the current month the company started and finished Job T272. The following data were recorded for this job:

Job T272: Machining Customizing
Machine-hours 70 40
Direct labor-hours 60 20

The estimated total manufacturing overhead for the Machining Department is closest to:

17.

yare Corporation had the following inventory balances at the beginning and end of May:

May 1 May 30
Raw materials $27,500 $34,000
Finished Goods $77,000 $70,000
Work in Process $15,500 $16,808

During May, $60,500 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labor-hour, and it paid its direct labor workers $15 per hour. A total of 340 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $7,250 of direct materials cost. The Corporation incurred $42,600 of actual manufacturing overhead cost during the month and applied $40,800 in manufacturing overhead cost.

The actual direct labor-hours worked during May totaled:

Solutions

Expert Solution

16) Estimated total manufacturing overhead for the machining Department

Machining
Fixed Overhead 79200
Variable overhead (24000*2) 48000
Total 127200

17) Actual overhead = Applied overhead/overhead rate = 40800/12 = 3400 Hour


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