Sep 27, 2017 term paper 2

WHITE COMPANY – PREDETERMINED OVERHEAD

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White Company – predetermined overhead 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:

 

Department
CuttingFinishing
  Direct labor-hours8,00075,000
  Machine-hours64,2001,500
  Total fixed manufacturing overhead cost$400,000$483,000
  Variable manufacturing overhead per machine-hour$2.00
  Variable manufacturing overhead per direct labor-hour$2.75

 

Required:
1.Compute the predetermined overhead rate to be used in each department. (Round your answers to 2 decimal places.)

 

2.Assume that the overhead rates you computed in (1) above are in effect. The job cost sheet for Job 203, which was started and completed during the year, showed the following:

 

Department
CuttingFinishing
  Direct labor-hours419
  Machine-hours866
  Materials requisitioned$720$360
  Direct labor cost$35$170

 

Compute the total manufacturing cost assigned to Job 203. (Round your intermediate and final answers to 2 decimal places.)

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