Tomey Corporation has two production departments, Forming and Finishing. The com
ID: 2329678 • Letter: T
Question
Tomey Corporation has two production departments, Forming and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department’s predetermined overhead rate is based on machine-hours and the Finishing Department’s predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Forming Finishing Machine-hours 18,000 14,000 Direct labor-hours 2,000 8,000 Total fixed manufacturing overhead cost $ 99,000 $ 70,400 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.70 During the current month the company started and finished Job T617. The following data were recorded for this job: Job T617: Forming Finishing Machine-hours 90 20 Direct labor-hours 30 60 Direct materials $ 940 $ 350 Direct labor cost $ 960 $ 1,920 The total job cost for Job T617 is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $5,604 $2,584 $684 $3,020
Explanation / Answer
Answers
Working
Forming Department
Finishing Department
A
Fixed Overhead
$ 99,000.00
$ 70,400.00
Allocation base
machine hours
direct labor hours
B
Amount of allocation base
18,000 machine hours
8,000 direct labor hours
C = A/B
Fixed overhead rate
$ 5.50 per machine hour
$ 8.80 per direct labor hour
D
Variable overhead rate
$ 2.10 per machine hour
$ 3.70 per direct labor hour
E = C+D
Total Overhead
$ 7.60 per machine hour
$ 12.50 per direct labor hour
F
No. of machine hours for the Job
90 machine hours
NA
G = E x F
Amount of overhead allocated
$ 684.00
NA
H
No. of direct labor hours for the Job
NA
60 direct labor hours
I = E x H
Amount of overhead allocated
NA
$ 750.00
Forming Department
Finishing Department
Total
Direct Material
$ 940.00
$ 350.00
$ 1,290.00
Direct labor
$ 960.00
$ 1,920.00
$ 2,880.00
Overhead allocated [calculated above]
$ 684.00
$ 750.00
$ 1,434.00
Total Job Cost for Job T617
$ 5,604.00
Working
Forming Department
Finishing Department
A
Fixed Overhead
$ 99,000.00
$ 70,400.00
Allocation base
machine hours
direct labor hours
B
Amount of allocation base
18,000 machine hours
8,000 direct labor hours
C = A/B
Fixed overhead rate
$ 5.50 per machine hour
$ 8.80 per direct labor hour
D
Variable overhead rate
$ 2.10 per machine hour
$ 3.70 per direct labor hour
E = C+D
Total Overhead
$ 7.60 per machine hour
$ 12.50 per direct labor hour
F
No. of machine hours for the Job
90 machine hours
NA
G = E x F
Amount of overhead allocated
$ 684.00
NA
H
No. of direct labor hours for the Job
NA
60 direct labor hours
I = E x H
Amount of overhead allocated
NA
$ 750.00