Problem:
Direct material 2,500 pounds (.75 per pound)
Direct labor 300 hours (7.50 per hour)
Overhead per dept (est.) $6,000
Direct labor (est.) 300 hours (200 in molding and 100 in firing)
Machine hours (est.) 200 (50 in molding and 150 in firing)
factory rent $3,000
factory utilities $3,700
advertising $2,500
factory equipment depre $3,000
sales commission $2,500
$14,700 overhead
Calculate a plantwide predetermined overhead rate using direct labor hours as the cost driver.
Calculate a plantwide predetermined overhead rate using machine hours as the cost driver.
Using the plantwide rate calculated on the basis of direct labor hours, how much overhead would be applied to a job requiring 25 direct labor hours?
Using the plantwide rate calculated on the basis of machine hours, how much overhead would be applied to a job requiring 5 machine hours?
Crystal is considering the use of department overhead rates. Assume that the cost driver for the molding department is machine hours.
How much overhead would be applied to a job using 10 direct labor hours and 3 machine hours in the molding department and 4 direct labor hours and 2 machine hours in the firing department?