Question
In: Accounting
Fab Furniture has two manufacturing departments--Cutting and Finishing. It considers all of its manufacturing overhead costs...
Fab Furniture has two manufacturing departments--Cutting and Finishing. It considers all of its manufacturing overhead costs to be fixed costs. The overhead estimates for the year and for one job (Order #75675) completed during the year are shown below.
| Estimated Data | Cutting | Finishing | Total | |||
| Manufacturing overhead costs | $ | 6,210,000 | $ | 6,750,000 | $ | 12,960,000 |
| Direct labor-hours | 135,000 | 81,000 | 216,000 | |||
| Machine-hours | 54,000 | 270,000 | 324,000 | |||
| Order # 75675 | Cutting | Finishing | Total |
| Direct labor-hours | 28 | 20 | 48 |
| Machine-hours | 20 | 23 | 43 |
Required:
1. Calculate the predetermined overhead rate and the amount of manufacturing overhead applied to Order #75675 assuming Fab Furniture uses a plantwide predetermined overhead rate based on direct labor hours.
2. Fab Furniture is considering using departmental predetermined overhead rates with direct labor-hours as the allocation base in Cutting and machine-hours as the allocation base in Finishing. Calculate the predetermined overhead rate for each department and the manufacturing overhead applied to Order #75675 using departmental rates.
(Round your intermediate calculation to 2 decimal places.)
3. Do you recommend that Fab Furniture use a plantwide overhead rate or departmental overhead rates? Why?
Solutions
ekkarill92 answered 7 months agoRelated Solutions
Wilmington Company has two manufacturing departments--Assembly and Fabrication. It considers all of its manufacturing overhead costs...
Wilmington Company has two manufacturing departments--Assembly
and Fabrication. It considers all of its manufacturing overhead
costs to be fixed costs. The first set of data that is shown below
is based on estimates from the beginning of the year. The second
set of data relates to one particular job completed during the
year--Job Bravo.
Estimated Data
Assembly
Fabrication
Total
Manufacturing overhead costs
$
6,720,000
$
7,280,000
$
14,000,000
Direct labor-hours
140,000
84,000
224,000
Machine-hours
56,000
280,000
336,000
Job Bravo
Assembly...
Wilmington Company has two manufacturing departments--Assembly and Fabrication. It considers all of its manufacturing overhead costs...
Wilmington Company has two manufacturing departments--Assembly
and Fabrication. It considers all of its manufacturing overhead
costs to be fixed costs. The first set of data that is shown below
is based on estimates from the beginning of the year. The second
set of data relates to one particular job completed during the
year--Job Bravo.
Estimated Data
Assembly
Fabrication
Total
Manufacturing overhead costs
$
6,210,000
$
6,750,000
$
12,960,000
Direct labor-hours
135,000
81,000
216,000
Machine-hours
54,000
270,000
324,000
Job Bravo
Assembly...
Wilmington Company has two manufacturing departments--Assembly and Fabrication. It considers all of its manufacturing overhead costs...
Wilmington Company has two manufacturing departments--Assembly
and Fabrication. It considers all of its manufacturing overhead
costs to be fixed costs. The first set of data that is shown below
is based on estimates from the beginning of the year. The second
set of data relates to one particular job completed during the
year--Job Bravo.
Estimated Data
Assembly
Fabrication
Total
Manufacturing overhead
costs
$
3,960,000
$
4,400,000
$
8,360,000
Direct labor-hours
110,000
66,000
176,000
Machine-hours
44,000
220,000
264,000
Job Bravo
Assembly...
Wilmington Company has two manufacturing departments--Assembly and Fabrication. It considers all of its manufacturing overhead costs...
Wilmington Company has two manufacturing departments--Assembly
and Fabrication. It considers all of its manufacturing overhead
costs to be fixed costs. The first set of data that is shown below
is based on estimates from the beginning of the year. The second
set of data relates to one particular job completed during the
year--Job Bravo.
Estimated
Data
Assembly
Fabrication
Total
Manufacturing
overhead costs
$
2,850,000
$
3,230,000
$
6,080,000
Direct
labor-hours
95,000
57,000
152,000
Machine-hours
38,000
190,000
228,000
Job Bravo
Assembly...
Wilmington Company has two manufacturing departments--Assembly and Fabrication. It considers all of its manufacturing overhead costs...
Wilmington Company has two manufacturing departments--Assembly
and Fabrication. It considers all of its manufacturing overhead
costs to be fixed costs. The first set of data that is shown below
is based on estimates from the beginning of the year. The second
set of data relates to one particular job completed during the
year--Job Bravo.
Estimated Data
Assembly
Fabrication
Total
Manufacturing overhead costs
$
7,250,000
$
7,830,000
$
15,080,000
Direct labor-hours
145,000
87,000
232,000
Machine-hours
58,000
290,000
348,000
Job Bravo
Assembly...
Wilmington Company has two manufacturing departments--Assembly and Fabrication. It considers all of its manufacturing overhead costs...
Wilmington Company has two manufacturing departments--Assembly
and Fabrication. It considers all of its manufacturing overhead
costs to be fixed costs. The first set of data that is shown below
is based on estimates from the beginning of the year. The second
set of data relates to one particular job completed during the
year--Job Bravo.
Estimated Data
Assembly
Fabrication
Total
Manufacturing overhead
costs
$
4,370,000
$
4,830,000
$
9,200,000
Direct labor-hours
115,000
69,000
184,000
Machine-hours
46,000
230,000
276,000
Job Bravo
Assembly...
Wilmington Company has two manufacturing departments--Assembly and Fabrication. It considers all of its manufacturing overhead costs...
Wilmington Company has two manufacturing departments--Assembly
and Fabrication. It considers all of its manufacturing overhead
costs to be fixed costs. The first set of data that is shown below
is based on estimates from the beginning of the year. The second
set of data relates to one particular job completed during the
year--Job Bravo.
Estimated Data
Assembly
Fabrication
Total
Manufacturing overhead
costs
$
4,370,000
$
4,830,000
$
9,200,000
Direct labor-hours
115,000
69,000
184,000
Machine-hours
46,000
230,000
276,000
Job Bravo
Assembly...
Mason Company has two manufacturing departments—Machining and Assembly. The company considers all of its manufacturing overhead...
Mason Company has two manufacturing departments—Machining and
Assembly. The company considers all of its manufacturing overhead
costs to be fixed costs. It provided the following estimates at the
beginning of the year as well as the following information with
respect to Jobs A and B:
Estimated DataMachiningAssemblyTotalManufacturing
overhead$12,500,000 $625,000 $13,125,000 Direct labor hours
25,000 500,000 525,000 Machine hours
500,000 20,000 520,000
Job AMachiningAssemblyTotalDirect labor
hours51015Machine hours11213
Job BMachiningAssemblyTotalDirect labor hours459Machine
hours12315
Required:
1. If Mason Company uses a plantwide predetermined overhead rate
with direct...
Mason Company has two manufacturing departments—Machining and Assembly. The company considers all of its manufacturing overhead...
Mason Company has two manufacturing departments—Machining and
Assembly. The company considers all of its manufacturing overhead
costs to be fixed costs. It provided the following estimates at the
beginning of the year as well as the following information with
respect to Jobs A and B:
Estimated Data
Machining
Assembly
Total
Manufacturing overhead
$
16,038,000
$
729,000
$
16,767,000
Direct labor hours
27,000
594,000
621,000
Machine hours
594,000
22,000
616,000
Job A
Machining
Assembly
Total
Direct labor hours
5
10
15...
Mason Company has two manufacturing departments—Machining and Assembly. The company considers all of its manufacturing overhead...
Mason Company has two manufacturing departments—Machining and
Assembly. The company considers all of its manufacturing overhead
costs to be fixed costs. It provided the following estimates at the
beginning of the year as well as the following information with
respect to Jobs A and B:
Estimated Data
Machining
Assembly
Total
Manufacturing overhead
$
12,500,000
$
625,000
$
13,125,000
Direct labor hours
25,000
500,000
525,000
Machine hours
500,000
20,000
520,000
Job A
Machining
Assembly
Total
Direct labor hours
5
10
15...
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