Question

How do you solve for total manufacturing costs using the 2 table

Exercise 2-13 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: Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Department Cutting Finishing 6,100 74,000 62,000 1,400 $ 390,000 $ 431,000 - $ 4.75 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: Direct labor-hours Machine-hours Direct materials Direct labor cost Department Cutting Finishing 16 87 $ 380 $ 400 $ 730 $125 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates? Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required 3 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. (Round your intermediate calculations to 2 decimal places and your final answer to the nearest dollar amount.) Show less Total manufacturing cost

Answer 1

Predetermined overhead rate:

Cutting department = $390,000/62,000 + $4 = $10.29

Finishing department = $431,000/74,000 + $4.75 = $10.57

2.

	Cutting	Finishing	Total
Direct material	$730	$380	$1,110
Direct labor	125	400	525
Manufacturing overhead applied	895 (87*$10.29)	169 (16*$10.57)	1,064
Total manufacturing cost	$1,750	$949	$2,699

Total manufacturing cost = $2,699