A manufacturing firm produces electrical items for export market. The company uses a job order...

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A manufacturing firm produces electrical items for export market. The company uses a job – order costing system in which a predetermined overhead rates are used to apply manufacturing overhead cost to jobs. All cost related to a particular job are recorded in a job cost sheet. The finished products goes through two processes production dept 1 and production dept 2. The predetermined overhead in the production department 1 is based on labour hours and production department 2 based on machine hours. The following estimates were made at the beginning of the year: Production Department 1 Direct labour hours 1,000 100 Machine hours 100 500 Direct materials cost $650,000 $400,000 Direct labour cost $360,000 $300,000 Manufacturing overhead cost $200,000 $150,000 A special order of 50 items was received from a company in a peighbouring country and was accepted and completed during the year. The company's cost record shows the following information concerning the job: Department 1 Machine hours 5 30 Direct labour hours 15 2 Direct materials cost $420 $450 Direct labour cost $280 $150 i Compute the predetermined overhead rate used during the year in Production Dept 1 and 2 department. (2 marks) ii. Compute the total overhead cost applied to the special order. (2 marks) NI A manufacturing firm produces electrical items for export market. The company uses a job – order costing system in which a predetermined overhead rates are used to apply manufacturing overhead cost to jobs. All cost related to a particular job are recorded in a job cost sheet. The finished products goes through two processes production dept 1 and production dept 2. The predetermined overhead in the production department 1 is based on labour hours and production department 2 based on machine hours. The following estimates were made at the beginning of the year: Production Department 1 Direct labour hours 1,000 100 Machine hours 100 500 Direct materials cost $650,000 $400,000 Direct labour cost $360,000 $300,000 Manufacturing overhead cost $200,000 $150,000 A special order of 50 items was received from a company in a peighbouring country and was accepted and completed during the year. The company's cost record shows the following information concerning the job: Department 1 Machine hours 5 30 Direct labour hours 15 2 Direct materials cost $420 $450 Direct labour cost $280 $150 i Compute the predetermined overhead rate used during the year in Production Dept 1 and 2 department. (2 marks) ii. Compute the total overhead cost applied to the special order. (2 marks) NI

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