(a) If RBSB uses a plantwide overhead rate: (i) Calculate the predetermined overhead rate for the year 2020. (ii) Determine the total of manufacturing overhead cost applied to Job 120. (b) If RBSB uses departmental overhead rate: (i) Calculate the predetermined overhead rate for each department for the year 2020. (ii) Determine the total of manufacturing overhead cost applied to Job 120. (c) Between the plantwide rate in part (a) (ii) and the departmental rate in part (b) (ii) above, which manufacturing overhead rate would you recommend to be applied for Job 120? Justify your answer.
(a) If RBSB uses a plantwide overhead rate: (i) Calculate the predetermined overhead rate for the year 2020. (ii) Determine the total of manufacturing overhead cost applied to Job 120. (b) If RBSB uses departmental overhead rate: (i) Calculate the predetermined overhead rate for each department for the year 2020. (ii) Determine the total of manufacturing overhead cost applied to Job 120. (c) Between the plantwide rate in part (a) (ii) and the departmental rate in part (b) (ii) above, which manufacturing overhead rate would you recommend to be applied for Job 120? Justify your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
REQUIRED:
(a) If RBSB uses a plantwide
(i) Calculate the predetermined overhead rate for the year 2020.
(ii) Determine the total of
(b) If RBSB uses departmental overhead rate:
(i) Calculate the predetermined overhead rate for each department for the year 2020.
(ii) Determine the total of manufacturing overhead cost applied to Job 120.
(c) Between the plantwide rate in part (a) (ii) and the departmental rate in part (b) (ii) above, which manufacturing overhead rate would you recommend to be applied for Job 120? Justify your answer.
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QUESTION 1
Rally Baling Sdn Bhd (RBSB) makes custom made kitchen cabinet. The company uses a job-
order costing system and predetermined overhead rates to apply manufacturing overhead cost to
jobs. Currently, RBSB uses a plantwide overhead rate based on direct labor costs in estimating
the company manufacturing overhead. The following estimated data have been made by RBSB
at the beginning of the year 2020:
Department
Moulding
10,000
Costs
Assembling
40,000
10,000
RM80,000
RM165,000
RM220,000
Finishing
8,000
Direct labor hours
Machine hours
50,000
10,000
RM50,000
Direct labor costs
RM50,000
Direct materials costs
RM120,000
RM70,000
RM20,000
Manufacturing overhead costs
RM180,000
Job No. 120 was started on 1 January 2020 and completed on 31 January 2020. This job was
ordered by Wan Kemara School in Changlun, Kedah. RBSB's cost records shown the following
information on the Job No. 120:
Department
Assembling
700
Finishing
800
Costs
Moulding
200
Direct labor hours
Machine hours
100
1,200
1,000
Direct labor costs
RM2,000
RM12,500
RM5,000
Direct materials costs
RM5,000
RM4,000
RM16,000
RM22,000
RM2,500
RM12,000
Manufacturing overhead costs
Recently, you as the plant manager have heard that departmental overhead rates can offer
significantly better cost assignments than a plantwide rate can offer. In implementing this new
overhead rate base, the predetermined overhead rate in the Moulding Department will be based
on direct labor hours; Assembling Department will be based on machine hours; and the rate in
the Finishing Department will be based on direct labor costs.
REQUIRED:
(a) IFRBSB uses a plantwide overhead rate:
(i)
Calculate the predetermined overhead rate for the year 2020.
(ii) Determine the total of manufacturing overhead cost applied to Job 120.
2.
126
M Spell Check](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0c9aec1e-92e9-4dcf-bf43-b0e382eaf57f%2F335190a8-2261-4945-b017-2973fd89a2d1%2Fzq7xmh_processed.png&w=3840&q=75)
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QUESTION 1
Rally Baling Sdn Bhd (RBSB) makes custom made kitchen cabinet. The company uses a job-
order costing system and predetermined overhead rates to apply manufacturing overhead cost to
jobs. Currently, RBSB uses a plantwide overhead rate based on direct labor costs in estimating
the company manufacturing overhead. The following estimated data have been made by RBSB
at the beginning of the year 2020:
Department
Moulding
10,000
Costs
Assembling
40,000
10,000
RM80,000
RM165,000
RM220,000
Finishing
8,000
Direct labor hours
Machine hours
50,000
10,000
RM50,000
Direct labor costs
RM50,000
Direct materials costs
RM120,000
RM70,000
RM20,000
Manufacturing overhead costs
RM180,000
Job No. 120 was started on 1 January 2020 and completed on 31 January 2020. This job was
ordered by Wan Kemara School in Changlun, Kedah. RBSB's cost records shown the following
information on the Job No. 120:
Department
Assembling
700
Finishing
800
Costs
Moulding
200
Direct labor hours
Machine hours
100
1,200
1,000
Direct labor costs
RM2,000
RM12,500
RM5,000
Direct materials costs
RM5,000
RM4,000
RM16,000
RM22,000
RM2,500
RM12,000
Manufacturing overhead costs
Recently, you as the plant manager have heard that departmental overhead rates can offer
significantly better cost assignments than a plantwide rate can offer. In implementing this new
overhead rate base, the predetermined overhead rate in the Moulding Department will be based
on direct labor hours; Assembling Department will be based on machine hours; and the rate in
the Finishing Department will be based on direct labor costs.
REQUIRED:
(a) IFRBSB uses a plantwide overhead rate:
(i)
Calculate the predetermined overhead rate for the year 2020.
(ii) Determine the total of manufacturing overhead cost applied to Job 120.
2.
126
M Spell Check
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