Job Cost Using Plantwide and Departmental Overhead Rates
Lindberg Company uses a normal job-order costing system. There are two departments, Assembly and Finishing, through which most jobs pass. Selected budgeted and actual data for the past year follow:
|
|
Assembly
|
Finishing
|
|
Budgeted overhead
|
$330,000
|
$1,000,000
|
|
Actual overhead
|
110,000
|
520,000
|
|
Expected activity (direct labor hours)
|
150,000
|
25,000
|
|
Expected machine hours
|
25,000
|
125,000
|
During the year, several jobs were completed. Data pertaining to one such job, Job 330, follow:
|
Direct materials
|
$730,000
|
|
Direct labor cost:
|
|
|
Assembly (5,000 hours @ $12 per hr.)
|
$60,000
|
|
Finishing (400 hours @ $12 per hr.)
|
$4,800
|
|
Machine hours used:
|
|
|
Assembly
|
100
|
|
Finishing
|
1,200
|
|
Units produced
|
10,000
|
Lindberg Company uses a plantwide predetermined overhead rate based on direct labor hours (DLH) to assign overhead to jobs.
Required:
1. Compute the predetermined overhead rate.
2. Using the predetermined rate, compute the per-unit manufacturing cost for Job 330. (Round the unit cost to the nearest cent.)
3. Recalculate the unit manufacturing cost for Job 330 using departmental overhead rates. Use direct labor hours for Assembly and machine hours for Finishing.