Asked by YUEYING HUANG on Jun 04, 2024
Verified
Dietzen Corporation has two manufacturing departments--Casting and Finishing.The company used the following data at the beginning of the year to calculate predetermined overhead rates: During the most recent month, the company started and completed two jobs--Job D and Job J.There were no beginning inventories.Data concerning those two jobs follow: Required:
a.Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours.Calculate the total manufacturing cost assigned to Job D.
b.Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours.Calculate the total manufacturing cost assigned to Job J.
Predetermined Overhead Rate
A rate calculated prior to the accounting period that is used to allocate overhead costs to products or job orders, based on estimated overhead costs and an allocation base.
Job-Order Costing
A cost accounting system that accumulates costs according to specific jobs or orders, allowing for detailed cost tracking.
Manufacturing Cost
The total expense incurred in the production of goods, including direct materials, direct labor, and manufacturing overhead.
- Attribute overhead costs to particular jobs based on the predetermined overhead rate.
- Compute the cumulative expense of a task, factoring in direct materials, direct labor, and overhead allocation.
Verified Answer
Casting Finishing The second step is to combine the estimated manufacturing overhead costs in the two departments ($24,000 + $31,800 = $55,800)to calculate the plantwide predetermined overhead rate as follow: The overhead applied to Job D is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job
= $5.58 per MH x (2,700 MHs + 2,400 MHs)
= $5.58 per MH x (5,100 MHs)
= $28,458
Job D's manufacturing cost: b.The overhead applied to Job J is calculated as follows:
Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job
= $5.58 per MH x (1,300 MHs + 3,600 MHs)
= $5.58 per MH x (4,900 MHs)
= $27,342
Job J's manufacturing cost:
Learning Objectives
- Attribute overhead costs to particular jobs based on the predetermined overhead rate.
- Compute the cumulative expense of a task, factoring in direct materials, direct labor, and overhead allocation.
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