woodgrain technology makes home office furniture from fine hardwoods the company u 385752
WoodGrain Technology makes home office furniture from fine hardwoods. The company uses a job order costing system and predetermined overhead rates to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Preparation Department is based on machine hours. and the rate in the Fabrication Department is based on direct labor hours. At the beginning of the year, the company’s management made the following estimates for the year:
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|
Department |
||
|
Preparation |
Fabrication |
|
|
Machine hours |
80,000 |
21,000 |
|
Direct labor hours a |
35,000 |
50,000 |
|
Direct materials cost |
$190,000 |
$400,000 |
|
Direct labor cost |
$280,000 |
$530,000 |
|
Fixed manufacturing overhead cost |
$256,000 |
$520,000 |
|
Variable manufacturing overhead per machine hour |
$2.00 |
|
|
Variable manufacturing overhead per direct labor hour |
|
$4.00 |
Job 127 was started on April 1 and completed on May 12. The company’s cost records show the following information concerning the job:
|
Department |
||
|
Preparation |
Fabrication |
|
|
Machine hours |
350 |
70 |
|
Direct labour hours |
80 |
130 |
|
Direct materials cost |
$940 |
$1,200 |
|
Direct labour cost |
$710 |
$980 |
Required:
1. Compute the predetermined overhead rate used during the year in the Preparation Department. Compute the rate used in the Fabrication Department.
2. Compute the total overhead cost applied to Job 127.
3. What would be the total cost recorded for Job 127? If the job contained 25 units, what would be the unit product cost?
4. At the end of the year, the records of WoodGrain Technology revealed the following actual cost and operating data for all jobs worked on during the year:
|
Department |
||
|
Preparation |
Fabrication |
|
|
Machine hours |
73,000 |
24,000 |
|
Direct labour hours |
30,000 |
54,000 |
|
Direct materials cost |
$165,000 |
$420,000 |
|
Manufacturing overhead cost |
$390,000 |
$740,000 |
What was the amount of underapplied or overapplied overhead in each department at the end of the year?
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