Question

Harnett Corporation has two manufacturing departments--Molding and Assembly. The company used the following data at the beginning of the period to calculate predetermined overhead rates:

	Molding		Assembly		Total
Estimated total machine-hours (MHs)		3,000		7,000		10,000
Estimated total fixed manufacturing overhead cost	$	24,000	$	53,200	$	77,200
Estimated variable manufacturing overhead cost per MH	$	1.00	$	2.00

During the period, the company started and completed two jobs--Job E and Job M. Data concerning those two jobs follow:

	Job E		Job M
Direct materials	$	21,600	$	9,300
Direct labor cost	$	22,600	$	9,500
Molding machine-hours		2,500		500
Assembly machine-hours		2,500		4,500

Required:

a. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate that overhead rate. (Round your answer to 2 decimal places.)

b. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the amount of manufacturing overhead applied to Job E. (Do not round intermediate calculations.)

c. Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. Calculate the total manufacturing cost assigned to Job E. (Do not round intermediate calculations.)

a. Predetermined overhead rate b. Manufacturing overhead applied c. Manufacturing cost per MH

Answer 1

Answers

• All working forms part of the answer
• Working

Working		Molding	Assembly	Total
A	Estimated machine hours	3,000	7,000	10,000
B	Variable overhead per MH	$1	$2
C = A x B	Total Variable Overhead	$3,000	$14,000	$17,000

• Requirement ‘a’

A	Total variable Overhead	$17,000
B	Tota Fixed Overhead	$77,200
C = A+B	Total manufacturing overhead	$94,200
D	Total machine hours	10,000
E = C/D	Plantwide manufacturing overhead rate	$                     9.42 = Answer

• Requirement ‘b’

A	Job E Total machine hours	$5,000
B	Plantwide manufacturing overhead rate	$                     9.42
C = A x B	Manufacturing Overhead applied to Job E	$47,100 = Answer

• Requirement ‘c’

A	Direct Materials	$21,600
B	Direct Labor Cost	$22,600
C	Manufacturing Overhead	$47,100
D = A+B+C	Total manufacturing cost assigned to Job E	$91,300 = Answer