Splitsville Company has two departments. Factory overhead costs are applied based on direct labor...

Question

Splitsville Company has two departments. Factory overhead costs are applied based on direct labor cost in Department A and machine hours in Department B. The
 following information is available:

Budgeted Items Dept. A Dept. B

Direct labor cost $180,000 $165,000

Machine hours 51,000 40,000

Factory overhead cost $225,000 $180,000

Actual data for Job #10 are as follows:

Actual Items Dept. A Dept. B

Direct materials requisitioned $10,000 $16,000

Direct labor cost $11,000 $14,000

Machine hours 5,000 3,000

Required:

A) Compute the budgeted factory overhead rate for Department A.

B) Compute the budgeted factory overhead rate for Department B.

C) What is the total overhead cost for Job #10?

D) If Job #10 consists of 50 units of product, what is the unit cost of this job?

David · Accepted Answer

Answer (A):
Answer (A):
$225,000/$180,000 = 125%
Answer (B):
$180,000/40,000 hrs. = $4.50 per hour
Answer (C):
($11,000 x 125 percent) + ($4.50 x 3,000 hrs.) = $27,250
Answer (D):
$10,000 + $16,000 + $11,000 + $14,000 + $27,250 = $78,250/50 units = $1,565 per unit.

Splitsville Company has two departments. Factory overhead costs are applied based on direct labor cost in Department A and machine hours in Department B. The following information is available:...

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