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jerico jerico
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9 years ago
Toyz Manufacturing uses departmental cost driver rates to apply manufacturing overhead costs to products. Manufacturing overhead costs are applied on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department. At the beginning of 2014, the following estimates were provided for the coming year:

   Machining   Assembly
   Direct labor-hours (dlh)   10,000   dlh   150,000   dlh
   Machine-hours (mh)   100,000   mh   5,000   mh
   Direct labor cost   $ 80,000   $720,000
   Manufacturing overhead costs   $200,000   $450,000

The accounting records of the company show the following data for Job #897:
   Machining   Assembly
   Direct labor-hours (dlh)   50   dlh   120   dlh
   Machine-hours (mh)   170   mh   10   mh
   Direct material cost   $3,000   $1,600
   Direct labor cost   $400   $1,500

Required:
a.   Compute the manufacturing overhead allocation rate for each department.
b.   Compute the total cost of Job #897.
c.   Provide possible reasons why Toyz Manufacturing uses two different cost allocation rates.
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Cost Accounting

Cost Accounting


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cyborgcyborg
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jerico Author
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#2
9 years ago
This solved my problem perfectly, thank you for your kind input.
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#3
9 years ago
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