Bulla Corporation has two production departments, Machining and Customizing. The

Question

Bulla Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates Machining Customizing Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 17,000 4,000 $70, 400 85,000 16,000 3,000 $ 3.00 $ 6.00 During the current month the company started and finished Job K369 The following data were recorded for this job Job K369: Machine-hours Direct labor-hours Machining Customizing 70 40 20 80 Required: Calculate the total amount of overhead applied to Job K369 in both departments. (Do not round intermediate calculations.) loverhppliedir - ead a

Explanation / Answer

Total Overhead Allocated for Job K369 = 111,422 + 990 = 112,412

Job K369 Machining Customizing Total Fixed OH 70,400 85,000 Allocation basis-Machine Hours (70+20=90) 70,400* (70/90)=54,755.56 Allocation Basis-Labour Hours (80+40=120) 85,000*(80/120)= 56,666.67 Total Fixed OH Allocated 54,755.56 56,666,.67 111,422

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