Assume a company started and completed numerous jobs during July—two of which were Job Y and Job Z. The company uses two departmental predetermined overhead rates. The rate in the Machining Department is based on machine-hours and the rate in the Assembly Department is based on direct labor-hours. The following additional information from the month of July is available for the company as a whole and for Jobs Y and Z:     Machining Assembly Estimated total fixed manufacturing overhead $ 48,000 $ 30,000 Estimated variable manufacturing overhead per machine-hour $ 1.50   Estimated variable manufacturing overhead per direct labor-hour   $ 2.00 Estimated total machine-hours to be used 12,000   Estimated total direct labor hours to be worked   10,000

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Assume a company started and completed numerous jobs during July—two of which were Job Y and Job Z. The company uses two departmental predetermined overhead rates. The rate in the Machining Department is based on machine-hours and the rate in the Assembly Department is based on direct labor-hours. The following additional information from the month of July is available for the company as a whole and for Jobs Y and Z:
 

  Machining Assembly
Estimated total fixed manufacturing overhead $ 48,000 $ 30,000
Estimated variable manufacturing overhead per machine-hour $ 1.50  
Estimated variable manufacturing overhead per direct labor-hour   $ 2.00
Estimated total machine-hours to be used 12,000  
Estimated total direct labor hours to be worked   10,000

 

  Machining Assembly
Job Y    
Machine-hours 43  
Direct labor-hours   30
Job Z    
Machine-hours 40  
Direct labor-hours   60


How much manufacturing overhead is applied from the Machining Department to Job Y?  

Expert Solution
Step 1

Machine Hour rate = Here a machine is identified as a cost center. All related expenses are collected and summarize and effective machine hour rate is calculated.

Machine Hour Rate = Total overhead related to machine / Effective machine hour.

 

Job Costing - It is a method of costing which is used when job work is done. here we have to applied the pre-determined rate over a particular job

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