Solomons, Inc. has refined its allocation system by separating manufacturing overhead into two cost pools, one for each department. The estimated cost for the mixing department, $615,000, will be allocated based on direct labor hours, and the estimated direct labor hours for the year are 201,000. The estimated cost for the packaging department, $293,000, will be allocated based on direct labor hours, and the estimated machine hours for the year are 59,200. In October, the company incurred 17,240 direct labor hours in the mixing department and a total of 14,260 machine hours in the packaging department. (Round your answers to two decimal places when needed and use rounded answers for all future calculations). 1. Compute the predetermined overhead allocation rates. Department Total estimated overhead cost ? Total estimated quantity of the overhead allocation base = Predetermined Overhead Allocation Rate (Per Machine Hour) Mixing Department = Packaging Department = 2. Determine the total amount of overhead allocated in October. Department Predetermined Overhead Allocation Rate ? Actual Quantity of the Allocation Base Used = Allocated Manufacturing Overhead Cost Mixing Department = Packaging Department =

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Description: Solomons, Inc. has refined its allocation system by separating manufacturing overhead into two cost pools, one for each department. The estimated cost for the mixing department, $615,000, will be allocated based on direct labor hours, and the estimat

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...

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Solomons, Inc. has refined its allocation system by separating manufacturing overhead into two cost pools, one for each department. The estimated cost for the mixing department, $615,000, will be allocated based on direct labor hours, and the estimated direct labor hours for the year are 201,000. The estimated cost for the packaging department, $293,000, will be allocated based on direct labor hours, and the estimated machine hours for the year are 59,200. In October, the company incurred 17,240 direct labor hours in the mixing department and a total of 14,260 machine hours in the packaging department.

(Round your answers to two decimal places when needed and use rounded answers for all future calculations).

1. Compute the predetermined overhead allocation rates.

Department	Total estimated overhead cost	?	Total estimated quantity of the overhead allocation base	=	Predetermined Overhead Allocation Rate (Per Machine Hour)
Mixing Department				=
Packaging Department				=

2. Determine the total amount of overhead allocated in October.

Department	Predetermined Overhead Allocation Rate	?	Actual Quantity of the Allocation Base Used	=	Allocated Manufacturing Overhead Cost
Mixing Department				=
Packaging Department				=
				TOTAL

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