The Medley Company uses a job order costing system at its local plant. The plant...
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Accounting
The
Medley
Company uses a job order costing system at its local plant. The plant has a machining department and a finishing department. The company uses machine hours to allocate machining department overhead costs to jobs and uses direct labor cost to allocate finishing department overhead costs to jobs. Cost and practical capacity estimates for the current year are as follows
Requirements
(a)
Determine the cost driver rate for each department.
(b)
Cost records for job 101 show the following:
Determine the total cost charged to job 101.
Part 1
Requirement (a) Determine the cost driver rate for each department.
Identify the formula, then calculate the cost driver rate for each department. (Enter your answers as whole numbers.)
Machining department
/
=
Data table
Machining Department
Finishing Department
Manufacturing overhead costs
$240,000
$288,000
Machine hours
10,000
1,600
Direct labor hours
3,000
17,800
Direct labor cost
$116,000
$360,000
Answer & Explanation
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