Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products. Manufacturing overhead costs
Question:
Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products. Manufacturing overhead costs are allocated on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department. At the beginning of 20X3,the annual budget for the company is as follows.
MachiningAssembly
Directlabor-hours30,00060,000
Machine-hours80,00020,000
Direct laborcost$500,000$900,000
Manufacturing overheadcosts$420,000$240,000
Required:Please show your calculations!
(1)Determine the budgeted manufacturing overhead rate for each department.
(2) The actual cost of Job #316 is as follows:
MachiningAssembly
Directlabor-hours12070
Machine-hours605
Direct materialcost$300$200
Direct laborcost$100$400
What is the total cost of Job #316?
(3)At the end of 20X3, the actual amounts are as follow. Compute the under- or overallocated manufacturing overhead for the whole company.
Hint:Please calculate the under- or overallocated manufacturing overhead for each department first, and then add up the results of the two departments.
Machining Department
AssemblyDepartment
Manufacturing overhead incurred
$432,000
$260,000
Direct labor-hours
31,000
63,000
Machine-hours
85,000
21,000
Prepare the journal entry to write off the difference between actual and allocated overhead cost directly to cost of goods sold.
Expert Answer:
Sure lets go through each requirement step by step 1 Determine the budgeted manufacturing ... View the full answer
