Ask Question
10 August, 14:35

Use departmental overhead rates to allocate manufacturing overhead (Learning Objective:

Whitney Furniture uses departmental overhead rates (rather than a plantwide overhead rate) to allocate its manufacturing overhead to jobs. The company's two production departments have the following departmental overhead rates:

Cutting Department: $9 per machine hour

Finishing Department: $18 per direct labor hour

Job 484 used the following direct labor hours and machine hours in the two manufacturing departments:

Job 484 Cutting Department Finishing Department

Direct Labor Hours 2 7

Machine Hours 8 4

1. How much manufacturing overhead should be allocated to Job 484?

2. Assume that direct labor is paid at a rate of $24 per hour and Job 484 used $2,400 of direct materials. What was the total manufacturing cost of Job 484?

+4
Answers (2)
  1. 10 August, 15:42
    0
    1. Manufacturing overhead charged to Job 484 is $ 198

    2. Total manufacturing costs for job 484 is $2,814

    Explanation:

    Computation of overhead for Job 484

    Cutting department based on machine hours

    $ 9 per machine hour * 8 hours $ 72

    Finishing department on Direct Labor hours

    $ 18 per direct labor hour * 7 hours $ 126

    Total overhead for Job 484 $ 198

    Computation of total manufacturing costs for Job 484

    Direct labor Total hours used

    Cutting Department 2 hours

    Finishing department 7 hours

    Total hours - Direct Labor 9 hours

    Hourly rate $ 24 per hour

    Total Direct Labor Cost $ 24 * 9 hours $ 216

    Direct Materials $ 2,400

    Manufacturing overhead applied $ 198

    Total manufacturing costs for job 484 $ 2,814
  2. 10 August, 17:34
    0
    The overhead allocated to job 484 is $198

    Total manufacturing cost is $2814

    Explanation:

    Computation of job 484 overhead:

    In cutting department overhead is $9*8=$72

    In finishing department is $18*7 = $126

    Total overhead $198

    If direct labor is paid $24 per hour, the direct labor cost on job 484 is computed thus:

    Total labor hours used by the job=2+7=9 hours

    Total direct labor cost=9*$24=$216

    Hence total manufacturing cost on the job is calculated as:

    Direct materials $2400

    Direct labor cost $216

    Overhead $198

    $2814
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Use departmental overhead rates to allocate manufacturing overhead (Learning Objective: Whitney Furniture uses departmental overhead rates ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers