Question

Broucek Inc. makes baby furniture from fine hardwoods. The company uses a job-order costing system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Preparation Department is based on machine hours, and the rate in the Fabrication Department is based on direct labor-hours. At the beginning of the year, the company’s management made the following estimates for the year:

    

	Department
	Preparation	Fabrication
Machine-hours	99,000	30,000
Direct labor-hours	53,000	77,000
Direct materials cost	$214,000	$224,000
Direct labor cost	$480,000	$561,000
Fixed manufacturing overhead cost	$415,800	$662,200
Variable manufacturing overhead per machine-hour	$3.50	-
Variable manufacturing overhead per direct labor-hour	-	$5.50

Job 135 was started on April 1 and completed on May 12. The company's cost records show the following information concerning the job:

	Department
	Preparation	Fabrication
Machine-hours	400	86
Direct labor-hours	70	164
Direct materials cost	$1,140	$1,520
Direct labor cost	$890	$1,170

Required:

1.	Compute the predetermined overhead rate used during the year in the Preparation Department. Compute the rate used in the Fabrication Department. (Round your answers to 2 decimal places.)

          

	Predetermined Overhead Rate Preparation department per MH Fabrication department per DLH

2.	Compute the total overhead cost applied to Job 135. (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answer to the nearest dollar amount.)

          

3-a.	What would be the total cost recorded for Job 135? (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount.)

          

	Department Preparation Fabrication Total Direct materials Direct labor Manufacturing overhead Total cost

3-b.	If the job contained 44 units, what would be the unit product cost? (Round "Predetermined overhead rate" and final answer to 2 decimal places and other intermediate calculations to the nearest dollar amount.)

         

4.	At the end of the year, the records of Broucek Inc. revealed the following actual cost and operating data for all jobs worked on during the year:

	Department
	Preparation	Fabrication
Machine-hours	61,200	26,800
Direct labor-hours	38,000	55,000
Direct materials cost	$175,800	$432,000
Manufacturing overhead cost	$475,550	$721,400

  

	What was the amount of underapplied or overapplied overhead in each department at the end of the year? (Round "Predetermined overhead rate" to 2 decimal places.)

          

rev: 10_28_2015_QC_CS-28446

	Preparation Department Fabrication Department

Answer 1