WoodGrain Technology makes home office furniture from fine hardwoods. The company uses a job-order costing system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Preparation Department is based on machine hours, and the rate in the Fabrication Department is based on direct labor-hours. At the beginning of the year, the company’s management made the following estimates for the year:

	Department
	Preparation				Fabrication
Machine-hours		83,000				32,000
Direct labor-hours		33,000				56,600
Direct materials cost	$	189,000			$	199,000
Direct labor cost	$	273,000			$	520,000
Fixed manufacturing overhead cost	$	215,800			$	492,420
Variable manufacturing overhead per machine-hour	$	3.00				-
Variable manufacturing overhead per direct labor-hour		-			$	5.00

Job 127 was started on April 1 and completed on May 12. The company's cost records show the following information concerning the job:

	Department
	Preparation					Fabrication
Machine-hours		330				72
Direct labor-hours		77				130
Direct materials cost	$	940			$	1,240
Direct labor cost	$	690			$	1010

Required:

1. Compute the predetermined overhead rate used during the year in the Preparation Department. Compute the rate used in the Fabrication Department. (Round predetermined overhead rate to 2 decimal places.)

2. Compute the total overhead cost applied to Job 127. (Round predetermined overhead rate to 2 decimal places and round your final answer to nearest whole dollar.)

3-a. What would be the total cost recorded for Job 127? (Round your predetermined overhead rate and intermediate calculations to 2 decimal places and round your final answer to nearest whole dollar.)

3-b. If the job contained 26 units, what would be the unit product cost? (Round predetermined overhead rate and final answer to 2 decimal places.)

4. At the end of the year, the records of WoodGrain Technology revealed the following actual cost and operating data for all jobs worked on during the year: (Round predetermined overhead rate to 2 decimal places.)

	Department
	Preparation				Fabrication
Machine-hours		82,700				24,700
Direct labor-hours		28,000				57,000
Direct materials cost	$	168,000			$	413,000
Manufacturing overhead cost	$	474,320			$	744,600

What was the amount of underapplied or overapplied overhead in each department at the end of the year?

Transcribed Image Text:

Tolal overnead cost 3-a. What would be the total cost recorded for Job 127? (Round your predetermined to nearest whole dollar.) Department Preparation Fabrication Total Direct materials Direct labor Manufacturing overhead Total cost 2$ 0. 2$ 3-b, If the job contained 26 units, what would be the unit product cost? (Round predete- Tolal overnead cost 3-a. What would be the total cost recorded for Job 127? (Round your predetermined to nearest whole dollar.) Department Preparation Fabrication Total Direct materials Direct labor Manufacturing overhead Total cost 2$ 0. 2$ 3-b, If the job contained 26 units, what would be the unit product cost? (Round predete-

Answer rating: 100% (QA)

Step 1 of 6 a Overheads It is the defined sum of the indirect cost incurred on various activities re... View the full answer