Question # 5 Kyle Corporation applies overhead cost to jobs on the basis of dire
ID: 2564371 • Letter: Q
Question
Question # 5 Kyle Corporation applies overhead cost to jobs on the basis of direct labor costs, Job V, which was started and completed during the current period, shows charges of S5,000 for direct materials, S10,000 for direct labor, and $7,000 for overhead. Job W, which is still in process at year end, shows charges of $2,500 for direct materials and $4,000 for direct labor 1- Should any overhead be added to Job W at year end? If so, how much? Question # 6 White Company has two departments, Cutting and Finishing. The company uses a job order costing system and computes a predetermined overhead rate in each department. The cutting department basis its rate on machine-hours, year the company made the following estimates: and the finishing department bases its rate on direct labor hours. At the beginning of the Finishing Cutting 6,000 50,000 $300,000 30,000 5,000 $370,000 Direct labor hours Machine hours Total fixed overhead costs Variable overhead per machine hour Variable overhead per direct labor hour S2.00 $4.00 I-Compute the predetermined overhead rate to be used in each department.Explanation / Answer
Q5) overhead rate = 7000/10000 70% of direct labor cost overhead to be added to job W at year end 4000*70% 2800 Answer Q6) predetermined overhead rate Cutting FOH (300,000/50,000) 0.6 VOH 2 predetermined overhead rate 2.6 per machine hour Finishing FOH(370,000/30,000) 12.33 VOH 4.00 predetermined overhead rate 16.33 per direct labor hour