Question

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]?

Answer 1

Instructions are listed below

Step-by-step 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