Business, 18.03.2021 01:20 isaacbryan2416

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 bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department
Cutting Finishing
Direct labor-hours 6,600 89,000
Machine-hours 68,500 3,200
Total fixed manufacturing overhead cost $390,000 $484,000
Variable manufacturing overhead per
machine-hour $4.00
Variable manufacturing overhead
per direct labor-hour $3.75
Required:
1. Compute the predetermined overhead rate for each department.
2. The job cost sheet for Job 203, which was started and completed during the year, showed the following:
Department
Cutting Finishing

Direct labor-hours 6 20
Machine-hours 80 4
Materials requisitioned $500 $310
Direct labor cost $70 $150
Required:
1. Compute the total manufacturing cost assigned to Job 203.
2. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide overhead rate based on direct labor-hours, rather than using departmental rates? Explain.

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White Company has two departments, Cutting and Finishing. The company uses a job-order costing syste...

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