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Author Question: Hill Manufacturing uses departmental cost driver rates to apply manufacturing overhead costs to ... (Read 199 times)

P68T

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on: Mar 6, 2021
Hill 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 2018, the following estimates were provided for the coming year:

MachiningAssembly
Direct labor-hours10,000dlh90,000dlh
Machine-hours100,000mh5,000mh
Direct labor cost$ 80,000$720,000
Manufacturing overhead costs$250,000$360,000

The accounting records of the company show the following data for Job #846:

MachiningAssembly
Direct labor-hours50dlh120dlh
Machine-hours170mh10mh
Direct material cost$2,700$1,600
Direct labor cost$ 400$ 900

Required:
a.Compute the manufacturing overhead allocation rate for each department.
b.Compute the total cost of Job #846.
c.Provide possible reasons why Hill Manufacturing uses two different cost allocation rates. 
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by P68T on Mar 6, 2021

whitcassie

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Reply #1 on: Mar 6, 2021
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P68T

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Reply 2 on: Mar 6, 2021
Excellent

bigcheese9

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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