Question

Garcia, Inc. uses a job-order costing system for its products, which pass from the Machining Department, to the Assembly Department, to finished-goods inventory. The Machining Department is heavily automated; in contrast, the Assembly Department performs a number of manual-assembly activities. The company applies manufacturing overhead using machine hours in the Machining Department and direct-labor cost in the Assembly Department. The following information relates to the year just ended: Machining Assembly Department Department Budgeted manufacturing overhead $4,000,000 $3,024,000 Actual manufacturing 4,270,000 3,040,000 overhead Budgeted direct-labor cost (based on practical capacity) 1,500,000 5,600,000 Actual direct-labor cost 1,450,000 5,780,000 Budgeted machine hours (based on practical capacity) 400,000 100,000 Actual machine hours 425,000 110,000 The data that follow pertain to job no. 775, the only job in production at year-end. Direct material Direct labor Machine hours Machining Assembly Department Department $24,500 $ 6,800 $ 27,900 $58,500 360 150 Selling and administrative expense amounted to $2,500,000.

Can someone help me determine the responses I co0uld not figure out on my own with regards to this question?

Answer 1

44 45 46 Overhead Rate = Machining Department Estimated Overhead Total Machine Hours Assembly Department Estimated Overhead Direct Manufacturing Labour Costs 47 48 49 4,000,000 400,000 3,024,000 5,600,000 50 51 52 10.00 Per Machine Hour 54% Per Direct Labour Costs 53 54 55 3) 56 Machining Department 10 425,000 4,250,000 Predetermined overhead rate (A) Actual direct labor hours (B) Applied Overheads (A*B) 57 58 59 60 61 Actual Overheads Applied Overheads Underapplied Overheads 4,270,000 4,250,000 20,000 62 63

64 4) 65 Assembly Department 54% 5,780,000 3,121,200 Predetermined overhead rate (A) Actual direct labor Cost (B) Applied Overheads (A*B) 66 67 68 69 70 Applied Overheads Actual Overheads Overerapplied Overheads 3,121,200 3,040,000 81,200 71 72 736) 74 75 How much overhead would have been charged to the company's Work-in-Process account during the year? Applied Overheads would have been charged to the Company's Work in Process Account 76 77 78 Applied Overheads in Machining Applied Overheads in Machining Total Overheads would have been charged to Work in Process 4,250,000 3,121,200 7,371,200 79 80 81