Managerial Accounting
17th Edition
ISBN: 9781260247787
Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Publisher: RENT MCG
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Chapter 2, Problem 13E
EXERCISE 2—13 Departmental Predetermined
White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates:
| Department | ||
| Cutting | Finishing | |
| Direct labor-hours | 6,000 | 30,000 |
| Machine-hours | 48,000 | 5,000 |
| Total fixed manufacturing overhead cost | $264,000 | $366,000 |
| Variable manufacturing overhead per machine-hour | $2.00 | - |
| Variable manufacturing overhead per direct labor-hour | - | $4.00 |
Required:
- Compute the predetermined overhead rate for each department.
- The
job cost sheet for Job 203, which was started and completed during the year, showed the following:
| Department | ||
| Cutting | Finishing | |
| Direct labor-hours | 6 | 20 |
| Machine-hours | 80 | 4 |
| Direct materials | $500 | $310 |
| Direct labor cost | $108 | $360 |
page 91
Using the predetermined overhead rates that you computed in (1) above, compute the total
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1
Mc
Graw
Exercise 2-13 (Static) Departmental Predetermined Overhead Rates [LO2-1, LO2-2, LO2-4]
White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a
predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing
Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates:
Department
Direct labor-hours
Machine-houre
Total fixed manufacturing overhead coat
Variable manufacturing overhead per machine-hour
Variable manufacturing overhead per direct labor-hour
Direct labor-hours
Machine-hours
Direct materials
Direct labor cost
Required:
1. Compute the predetermined overhead rate for each department.
2. The job cost sheet for Job 203, which was started and completed during the year, showed the following:
Department
Cutting
Required 1
6
NO
$ 500
$ 108
Cutting
6,000
48,000
$ 264,000
$ 2.00
Finishing
20
4
$310…
Problem 3 Predertimed Factory Overhead
Harold Corp uses the job order costing system. Factory overhead is applied to jobs on the basis of direct labor cost. The following estimates are made at the beginning of the year:
Fabricating Machining Assembly Total
Direct Labor 600,000 300,000 900,000 1,800,000
Fcatory overhead 1,050,000 1,200,000 270,000 2,520,000
The following are the cost required by each department.
Fabricating Machining Assembly Total
Direct Materials 9,000 600 4,200 13,800
Direct Labor 8,400 1,500 18,600 28,500
Factory overhead ? ? ? ?
At the end of the year, the…
8
Chapter 33
1.
EXERCISE 3-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs L03-1,
LO3-2, LO3-3, L03-4
Delph Company uses a job-order costing system and has two manufacturing departments-Molding
and Fabrication. The company provided the following estimates at the beginning of the year:
Machine-hours.....
Fixed manufacturing overhead cost....
Variable manufacturing overhead cost per machine-hour
3.
Job D-70
Direct materials cost.
Direct labor cost
Machine-hours..
Job C-200
Direct materials cost.
Direct labor cost
Machine-hours..
During the year, the company had no beginning or ending inventories and it started, com-
pleted, and sold only two jobs-Job D-70 and Job C-200. It provided the following information
related to those two jobs:
a.
b.
in C.
Molding
oshib
20,000
$700,000
$3.00
Total
Delph had no underapplied or overapplied manufacturing overhead during the year.
Required:
Assume Delph uses a plantwide predetermined overhead rate based on machine-hours.
Compute…
Chapter 2 Solutions
Managerial Accounting
Ch. 2.A - EXERCISE 2A-1 Activity-Based Absorption Costing...Ch. 2.A - EXERCISE 2A-2 Activity-Based Absorption Costing as...Ch. 2.A - EXERCISE 2A-3 Activity-Based Absorption Costing as...Ch. 2.A - PROBLEM 2A-4 Activity-Based Absorption Costing as...Ch. 2.A - Prob. 5PCh. 2.A -
CASE 2A-6 Activity-Based Absorption Costing and...Ch. 2.B - EXERCISE 2B-1 Overhead Rate Based on Capacity...Ch. 2.B - EXERCISE 2B-2 Overhead Rates and Capacity Issues...Ch. 2.B - Prob. 3PCh. 2.B - Prob. 4C
Ch. 2 - Prob. 1QCh. 2 - What is absorption costing?Ch. 2 - What is normal costing?Ch. 2 - How is the unit product cost of a job calculated?
Ch. 2 - Explain the four-step process used to compute a...Ch. 2 - What is the purpose of the job cost sheet in a...Ch. 2 - Explain why some production costs must be assigned...Ch. 2 - Why do companies use predetermined overhead rates...Ch. 2 - What factors should be considered in selecting an...Ch. 2 - If a company fully allocates all of its overhead...Ch. 2 - Would you expect the amount of applied overhead...Ch. 2 - Prob. 12QCh. 2 - What is a plantwide overhead rate? Whyare multiple...Ch. 2 - This Excel worksheet relates to the Dickson...Ch. 2 - This Excel worksheet relates to the Dickson...Ch. 2 - Prob. 3AECh. 2 - This Excel worksheet relates to the Dickson...Ch. 2 - Prob. 1F15Ch. 2 - Prob. 2F15Ch. 2 - Prob. 3F15Ch. 2 - Prob. 4F15Ch. 2 - Prob. 5F15Ch. 2 - Prob. 6F15Ch. 2 - Prob. 7F15Ch. 2 - Prob. 8F15Ch. 2 - Prob. 9F15Ch. 2 - Prob. 10F15Ch. 2 - Prob. 11F15Ch. 2 - Sweeten Company had no jobs in progress at the...Ch. 2 - Prob. 13F15Ch. 2 - Prob. 14F15Ch. 2 - Prob. 15F15Ch. 2 - EXERCISE 2-1 Compute a Predetermined Overhead Rate...Ch. 2 - Prob. 2ECh. 2 - EXERCISE 2–3 Computing Total Job Costs and Unit...Ch. 2 - EXERCISE 24 Computing Total Job Costs and Unit...Ch. 2 - EXERCISE 2-5 Computing Total Job Costs and Unit...Ch. 2 - Prob. 6ECh. 2 - EXERCISE 2-7 Job-Order Costing; Working Backwards...Ch. 2 - EXERCISE 2-8 Applying Overhead Cost; Computing...Ch. 2 - EXERCISE 2–9 Job-Order Costing and Decision Making...Ch. 2 - Prob. 10ECh. 2 - Prob. 11ECh. 2 - Prob. 12ECh. 2 - EXERCISE 2—13 Departmental Predetermined Overhead...Ch. 2 - EXERCISE 214 Job-Orders Costing for a Service...Ch. 2 - Prob. 15ECh. 2 - PROBLEM 2—16 Plantwide Predetermined Overhead...Ch. 2 - PROBLEM 217 Plantwide and Departmental...Ch. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - Prob. 20PCh. 2 - PROBLEM 2-21 Plant wide Versus Multiple...Ch. 2 - CASE 2-22 Plantwide versus Departmental Overhead...
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