Mason Company has two manufacturing departments-Machining and Assembly. The comp
ID: 2537004 • Letter: M
Question
Mason Company has two manufacturing departments-Machining and Assembly. The company considers all of its manufacturing overhead costs to be fixed costs. It provided the following estimates at the beginning of the year as well as the following information with respect to Jobs A andB Estimated Data Manufacturing overhead Direct labor hours Machine hours Machining Assembly $6,000,000 400,000 300,000 15,000 Total 6,400,000 20,000 300,000 320,000 315,000 Job A Direct labor hours Machine hours Machining Assembly Total 10 15 13 Job B Direct labor hours Machine hours Machining Assembly Total 4 12 15 Required 1. If Mason Company uses a plantwide predetermined overhead rate with direct labor-hours as the allocation base, how much manufacturing overhead cost would be applied to Job A? Job B? (Round your answers to the nearest whole dollar amount.) 2. Assume that Mason Company uses departmental predetermined overhead rates. The Machining Department is allocated based on machine-hours and the Assembly Department is allocated based on direct labor-hours. How much manufacturing overhead cost would be applied to Job A? Job B? (Round your intermediate calculations and final answers to 2 decimal places.)Explanation / Answer
1 Predetermined overhead rate = 6400000/320000 = $20 Overhead applied: Job A 300 =15*20 Job B 180 =9*20 2 Predetermined overhead rate: Machining 20 =6000000/300000 Assembly 1.33 =400000/300000 Overhead applied: Job A 233.30 =(11*20)+(10*1.33) Job B 246.65 =(12*20)+(5*1.33)