In establishing the predetermined overhead rates for 2017, the following estimat

Question

In establishing the predetermined overhead rates for 2017, the following estimates weren Department Manufacturing overhead Direct labor costs Direct labor hours Machine hours $1,200,000 $1,500,000 $900,000 $1,500,000 $1,250,000 $450,000 40,000 500,000 120,000 100,000 125,000 400,000 During January, the job cost sheets showed the following costs and production data Department $140,000 $126,000 $78,000 $120,000 $110,000 $37,500 Manufacturing overhead incurred $99,000 $124,000 $79,000 3,500 45,000 10,400 Direct materials used Direct labor costs Direct labor hours 8,000 11,000 Machine hours 34,000 Compute the total manufacturing costs assigned to jobs in January in each department. Manufacturing Costs Department D Department E Department K

Explanation / Answer

For department D:

Direct labour cost = $1500000/100000×8000 = 120000

Direct material cost = $140000

Manufacturing Oh = $1200000/400000×34000 = 102000

Total = 120000+140000+102000 = 362000

For department E

Direct labour cost = $1250000/125000×11000 = 110000

Direct material cost = $126000

Manufacturing OH = $1500000/500000×45000 = 135000

Total = 110000+126000+135000 = 371000

For department K

Direct labour cost = $450000/40000×3500 = $39375

Direct material = $78000

Manufacturing OH = $900000/120000×10400 = $78000

Total = 39375+78000+78000 = 195375

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