FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The Gilster Company, a machine tooling firm, has several plants. One plant, located in St. Cloud, Minnesota, uses a job order costing system for its batch production processes. The St. Cloud plant has two departments through which most jobs pass. Plant-wide
| Department A | Department B | ||||||
| Budgeted department overhead | |||||||
| (excludes plantwide overhead) | $ | 108,000 | $ | 329,000 | |||
| Actual department overhead | 120,000 | 344,000 | |||||
| Expected total activity: | |||||||
| Direct labor hours | 44,000 | 10,000 | |||||
| Machine-hours | 18,000 | 47,000 | |||||
| Actual activity: | |||||||
| Direct labor hours | 45,500 | 9,500 | |||||
| Machine-hours | 18,500 | 49,000 | |||||
For the coming year, the accountants at the St. Cloud plant are in the process of helping the sales force create bids for several jobs. Projected data pertaining only to job no. 110 are as follows.
| Direct materials | $ | 18,500 | |
| Direct labor cost: | |||
| Department A (2,200 hr) | 33,000 | ||
| Department B (1,200 hr) | 6,800 | ||
| Machine-hours projected: | |||
| Department A | 110 | ||
| Department B | 1,200 | ||
| Units produced | 14,000 | ||
Assume the St. Cloud plant uses three separate overhead rates to assign overhead costs to jobs.
b-1. Find the plant wide overhead rate by using expected machine hours.
b-2. Find the department overhead rate using expected machine hours for Department A and Department B.
b-3. Calculate the projected
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