X Company has two production departments, A and B. At the start of 2018, the following budgeted cost information was available: Overhead : Department A : $390,000, Department B $190,000 The following activity information is for X Company's only two jobs, Job 11 and Job 22, both of which were started and completed during the year: Job 11 Job 22 Direct labor hours in Department A 1,646 732, Direct labor hours in Department B 274 1,186 Machine hours in Department A 2,000 2,580, Machine hours in Department B 1,660 1,460 Using a departmental allocation system with machine hours as the cost driver in Department A and direct labor hours as the cost driver in Department B, what was the allocation to Job 11 [round overhead rate (s) to two decimal places]?

Question

Pollard

Business

12 November, 09:39

X Company has two production departments, A and B. At the start of 2018, the following budgeted cost information was available: Overhead : Department A : $390,000, Department B $190,000 The following activity information is for X Company's only two jobs, Job 11 and Job 22, both of which were started and completed during the year: Job 11 Job 22 Direct labor hours in Department A 1,646 732, Direct labor hours in Department B 274 1,186 Machine hours in Department A 2,000 2,580, Machine hours in Department B 1,660 1,460 Using a departmental allocation system with machine hours as the cost driver in Department A and direct labor hours as the cost driver in Department B, what was the allocation to Job 11 [round overhead rate (s) to two decimal places]?

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Answers (1)

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Maia Goodwin · Answer 1

Instructions are listed below

Explanation:

Giving the following information:

Overhead:

Department A : $390,000

Department B $190,000

Job 11:

Direct labor hours in Department B 274

Machine hours in Department A 2,000

Job 22:

Direct labor hours in Department B 1,186

Machine hours in Department A 2,580

Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base=

Department A = 390,000 / (2000 + 2580) = $85.15 per direct machine hour

Department B = 190,000 / (274 + 1186) = $130.14 per direct labor hour.

Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

Job 11:

Dept A = 85.15*2580 = $219,687

Dept B = 130.14*274 = $36,658.36