FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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8. Zubair Manufacturing Company uses a job order cost system in each of its two manufacturing
departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in
Department A and direct labor hours in Department B. In establishing the predetermined
overhead rates for 2020, the following estimates were made for the year.
Department
A
B
Manufacturing overhead
450,000
400,000
Direct labor costs
300,000
50,000
Direct labor hours
25,000
20,000
Machine hours
50,000
60,000
Department
A
$63,000
$55,000
Direct materials used
$70,000
Direct labor costs
$60,000
Manufacturing overhead
incurred
Direct labor hours
$86,000
$37,500
2,000
1,250
Machine hours
4,000
5,250
Business Administration Program Final Assessment Semester Fall 2020
Page
During January, the job cost sheets showed the following costs and production data
Instructions:
(a) Compute the predetermined overhead rate for each department.
(b) Compute the total manufacturing costs assigned to jobs in January in each department.
(c) Compute the under-or-over applied overhead for each department at January 31.
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Transcribed Image Text:8. Zubair Manufacturing Company uses a job order cost system in each of its two manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department A and direct labor hours in Department B. In establishing the predetermined overhead rates for 2020, the following estimates were made for the year. Department A B Manufacturing overhead 450,000 400,000 Direct labor costs 300,000 50,000 Direct labor hours 25,000 20,000 Machine hours 50,000 60,000 Department A $63,000 $55,000 Direct materials used $70,000 Direct labor costs $60,000 Manufacturing overhead incurred Direct labor hours $86,000 $37,500 2,000 1,250 Machine hours 4,000 5,250 Business Administration Program Final Assessment Semester Fall 2020 Page During January, the job cost sheets showed the following costs and production data Instructions: (a) Compute the predetermined overhead rate for each department. (b) Compute the total manufacturing costs assigned to jobs in January in each department. (c) Compute the under-or-over applied overhead for each department at January 31.
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