Assume a company has two manufacturing departments Assembly and Fabrication. The company considers all...
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Accounting
Assume a company has two manufacturing departments Assembly and Fabrication. The company considers all of its manufacturing overhead costs to be fixed costs. The first set of data below is budgeted data for the company as a whole that was estimated at the beginning of the year. The second set of data below is actual data for the company as a whole that was derived at the end of the year. The third set of data relates to one particular job completed during the year Job Z.
Budgeted Data
Assembly
Fabrication
Manufacturing overhead costs
$ 300,000
$ 400,000
Direct labor hours
25,000
15,000
Machine hours
10,000
50,000
Actual Data
Assembly
Fabrication
Manufacturing overhead costs
$ 330,000
$ 380,000
Direct labor hours
27,000
16,000
Machine hours
10,500
48,000
Job Z
Assembly
Fabrication
Direct labor hours
10.00
hours
2
hours
Machine hours
1
hour
7.00
hours
Assume the company uses departmental predetermined overhead rates. It uses direct labor-hours as the allocation base in Assembly and machine-hours as the allocation base in Fabrication. How much manufacturing overhead would be applied from both departments to Job Z?
Multiple Choice
$146
$156
$166
$176
Answer & Explanation
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