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Agassi Company 1200000

Price: $1.99


Agassi Company uses a job order cost system in each of its three manufacturing
departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in
Department D, direct labor hours in Department E, and machine hours in Department K.
In establishing the predetermined overhead rates for 2014, the following estimates
were made for the year.

   D   E   K 
Manufacturing overhead   1,200,000  1,500,000  900,000
Direct labor costs   1,500,000  1,250,000  450,000
Direct labor hours   100,000  125,000  40,000
Machine hours   400,000  500,000  120,000

During January, the job cost sheets showed the following costs and production data.


   D   E   K 
Direct materials used   140,000  126,000  78,000
Direct labor costs   120,000  110,000  37,500
Manufacturing overhead incurred   99,000  124,000  79,000
Direct labor hours   8,000  11,000  3,500
Machine hours   34,000  45,000  10,400

Instructions
(a) Compute the predetermined overhead rate for each department.
(b) Compute the total manufacturing costs assigned to jobs in January in each department.
(c) Compute the under- or overapplied overhead for each department at January 31.

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