Using the information below: What Manufacturing overhead for each department? Pr
ID: 2568420 • Letter: U
Question
Using the information below:
What Manufacturing overhead for each department?
Preparation deparrtment ______________________
Fabrication department ______________________
What is the Unit Product Cost per unit? __________________
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:
Job 127 was started on April 1 and completed on May 12. The company's cost records show the following information concerning the job:
Total Overhead Cost: $3,338
Predetermined Overhead rate for each department:
Preparation department $5.40 per MH
Fabrication department $13.60 per DLH
Department Preparation Fabrication Machine-hours 89,000 30,000 Direct labor-hours 32,000 59,800 Direct materials cost $ 188,000 $ 198,000 Direct labor cost $ 271,000 $ 513,000 Fixed manufacturing overhead cost $ 213,600 $ 514,280 Variable manufacturing overhead per machine-hour $ 3.00 - Variable manufacturing overhead per direct labor-hour - $ 5.00Explanation / Answer
Manufacturing overhead:
Preparation deparrtment = $5.40 x 89000 = $480600
Fabrication department = $13.60 x 59800 = $8132800
Product Cost per unit
Product Cost per unit = $7316
Preparationdeparrtment Fabrication
department Total product Direct materials $938 $1280 $2218 Direct labor 700 1010 1710 Manufacturing overhead $5.40 x 310
= 1674 $13.60 x 126
= 1718 3388 Total cost $3312.00 $4004 $7316
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