X Company has two production departments, A and B. At the start of the year, the

Question

X Company has two production departments, A and B. At the start of the year, the following budgeted information is available:

The following information is for two specific jobs, Job 111 and Job 222, that were completed during the year:

3. Using a plantwide allocation system with direct labor hours as the cost driver, what is the allocation to Job 222 (round overhead rates to the nearest cent)?

4. Using a departmental allocation system with direct labor hours as the cost driver in Department A and machine hours as the cost driver in Department B, what is the allocation to Job 222 (round overhead rates to the nearest cent)?

Department A    Overhead $6,700,000    Direct labor hours 60,000    Machine hours 100,000 Department B    Overhead $2,100,000    Direct labor hours 50,000    Machine hours 130,000

Explanation / Answer

3)

Using a plantwide allocation system with machine hours as the cost driver, what is the allocation to Job 222

overhead rate = (6,700,000 + 2,100,000)/(100,000 + 130,000) = 8,800,000/230,000 = $38.26 per machine hour

Allocation to job 222: 38.26*(1290 + 790) = $79,580.8

4)
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 is the allocation to Job 222

Dept A rate: 6,700,000/60,000 = $117.67 per machine hour
Dept B rate: 2,100,000/130,000 = $16.15 per labor hour
Allocated to job 222: 117.67*445 + 16.15*790 = $65,122

Related Questions

Navigate

• Browse (All)
• Browse X
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.