Accounting 2. The Diewold Company has two departments, milling and assembly. The company uses a job-order cost
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2. The Diewold Company has two departments, milling and assembly. The company uses a job-order cost system and computes a predetermined overhead rate in each department. The milling department bases its rate on machine hours, and the assembly department bases its rate on direct labor cost. At the beginning of 2023, the company made the following estimates: Direct labor-hours Milling 8,000 Machine-hours 60,000 Manufacturing overhead cost Direct labor cost $510,000 102,000 Predetermined overhead rate Assembly 40,000 3,000 $400,000 320,000 ? 125% of Direct Labor Cost During June, 2023 job #809 required the following from the respective departments: Direct labor-hours Machine-hours Direct materials requisitioned Direct labor cost Milling 5 Assembly 20 60 4 $300 $45 $120 $160 Required: (11 points) A) Determine the overhead rate to be used in the Milling department during 2023. B) Assume the company incurred total overhead cost of $875,000 during 2023 and had the following activity: Milling - 55,000 machine hours and Assembly - $331,000 direct labor cost. Was overhead under- or overallocated for 2023? NOTE: Be sure to provide an appropriate support for your response. 2. The Diewold Company has two departments, milling and assembly. The company uses a job-order cost system and computes a predetermined overhead rate in each department. The milling department bases its rate on machine hours, and the assembly department bases its rate on direct labor cost. At the beginning of 2023, the company made the following estimates: Direct labor-hours Milling 8,000 Machine-hours 60,000 Manufacturing overhead cost Direct labor cost $510,000 102,000 Predetermined overhead rate Assembly 40,000 3,000 $400,000 320,000 ? 125% of Direct Labor Cost During June, 2023 job #809 required the following from the respective departments: Direct labor-hours Machine-hours Direct materials requisitioned Direct labor cost Milling 5 Assembly 20 60 4 $300 $45 $120 $160 Required: (11 points) A) Determine the overhead rate to be used in the Milling department during 2023. B) Assume the company incurred total overhead cost of $875,000 during 2023 and had the following activity: Milling - 55,000 machine hours and Assembly - $331,000 direct labor cost. Was overhead under- or overallocated for 2023? NOTE: Be sure to provide an appropriate support for your response.
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Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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