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Wilmington Company has two manufacturing departments--Assembly and Fabrication
Wilmington Company has two manufacturing departments--Assembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is shown below is based on estimates from the beginning of the year. The second set of data relates to one particular job completed during the year--Job Bravo.
Estimated Data Assembly Fabrication Total
Manufacturing overhead costs $6,210,000 $6,750,000 $12,960,000
Direct labor-hours 135,000 81,000 216,000
Machine-hours 54,000 270,000 324,000
Job Bravo Assembly Fabrication Total
Direct labor-hours 28 20 48
Machine-hours 20 23 43
Required:
1. If Wilmington used a plantwide predetermined overhead rate based on direct labor-hours, how much manufacturing overhead would be applied to Job Bravo?
2. If Wilmington uses departmental predetermined overhead rates with 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 to Job Bravo?
(Round your intermediate calculation to 2 decimal places.)
1 - Plantwide Manufacturing Overhead applied to JOb bravo
2 - Manufacturing overhead applied from assembly to job bravo
3 - manufacturing overhead applied from fabrication to job bravo
4 - total departmental manufacturing overhead applied to job bravo
Expert Solution
| 1) Computation of Plantwide Manufacturing Overhead applied to JOb bravo: | ||
| Estimated Manufacturing Overhead (a) | 12960000 | |
| Estimated Total Direct Labor Hours (b) | 2,16,000 | DLHs |
| Predetermined Overhead Rate (a/b) | 60.00 | per DLH |
| Direct labor-hours worked on Bravo (a) | 28 | |
| Predetermined overhead rate (b) | 60 | per DLH |
| Overhead applied to Bravo (a*b) | 1680 |
| 2) Computation of Manufacturing overhead applied from assembly to job bravo: | ||
| Estimated manufacturing overhead (a) | 6210000 | |
| Estimated total direct labor-hours (b) | 1,35,000 | DLHs |
| Predetermined overhead rate (a/b) | 46 | per DLH |
| 3) Computation of Manufacturing overhead applied from fabrication to job bravo: | ||
| Estimated manufacturing overhead (a) | 6750000 | |
| Estimated total machine-hours (b) | 2,70,000 | MHs |
| Predetermined overhead rate (a/b) | 25.00 | per MH |
| 4) Computation of Total departmental manufacturing overhead applied to job bravo: | |||
| Assembly | Fabrication | Total | |
| Quantity of allocation base used (a) | 28 | 23 | |
| Predetermined overhead rate (b) | 46 | 25 | |
| Overhead applied to Bravo (a*b) | 1288 | 575 | 1863 |
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