a. Milling Department:
Milling Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per machine-hour × Total machine-hours in the department)
= $91,800 + ($2.00 per machine-hour × 17,000 machine-hours)
= $91,800 +$34,000 = $125,800
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $125,800 ÷ 17,000 machine-hours = $7.40 per machine-hour
Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $7.40 per machine-hour × 70 machine-hours = $518
Finishing Department:
Finishing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department)
= $64,200 + ($3.40 per direct labor-hour × 6,000 direct labor-hours)
= $64,200 + $20,400 = $84,600
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the = $84,600 ÷6,000 direct labor-hours = $14.10 per direct labor-hour
Overhead applied to a particular job = Predetermined overhead rate × Amount of the allocation base incurred by the job = $14.10 per direct labor-hour × 40 direct labor-hours = $564
Overhead applied to Job M565
b.
c.